Bitcoin once again fell below $7,000 as it plummeted by roughly $500 in minutes with many traders now bracing for more downside in the coming week.
Bitcoin (BTC) price has again dropped below $7,000 and at the time of writing the digital asset is struggling to hold above $6,700. The sharp downside to a new weekly low at $6,575 occurred despite an exciting Easter Sunday, which saw Bitcoin price drop to $6,772, then abruptly rebound to $7,176.
As reported earlier by Cointelegraph, top crypto traders now expect the price to drop lower to $6,400 before possibly retesting $5,800.
Crypto market daily performance. Source: Coin360
Data from Skew also shows that the abrupt correction lower led to the liquidation of $29 million in leveraged long positions at BitMEX, suggesting short-sellers interpreted Bitcon’s failure to top $7,200 as weakness and an opportunity to open short positions in anticipation of a pullback below $6,900.
BitMEX XBT USD Liquidations. Source: Skew
Reclaim $6,800 or a $5,800 retest is on the cards
BTC USDT daily chart. Source: TradingView
The move to $7,176 was encouraging but the price rejected right at the 50-day moving average, meaning the necessary push above $7,200 or a close at $7,000 failed to occur.
For the short-term, reclaiming $6,800-$6,900 would be a positive step in the right direction and at the time of writing the price is attempting to push through the volume profile visible range shows a high volume node in this range.
BTC USDT 4-hour chart. Source: TradingView
In the 4-hour timeframe, traders will notice that retaking $6,750 will bring the price above the moving average of the Bollinger Band indicator and currently the Relative Strength Index is pulling back up after dropping to 37.57.
Traders will now watch to see if Bitcoin either retakes $6,800 to make another attempt at a close above $7,000, or $6,750 now serves as resistance and traders have to contend with the price dropping to underlying supports at $6,400 and $6,200. As mentioned in an earlier analysis, a drop to $6,200 increases the likelihood of a $5,800 retest or even a drop below $4,000 again.
Aside from Bitcoin’s technical setup, there are other developments that could impact the crypto asset’s price action. On Sunday, U.S. President Donald Trump tweeted that he had personally brokered a deal that would end the oil war between Russia and Saudi Arabia.
According to the latest reports, OPEC and associated allies will cut production by 9.7 million barrels per day and the reduction represents the single largest cut in output in history. After the announcement of the deal oil futures traded higher but at the time of writing, futures for the Dow and S&P 500 are down 1.51% and 1.50%, respectively.
CME Bitcoin Futures (BTC1!) compared to S&P500 Futures 6-hour chart. Source: TradingView
Interestingly, as the S&P 500 and Dow futures dropped, CME Bitcoin futures also dropped, reinforcing the oft-discussed correlation between Bitcoin price and major equities markets.
Given the correlation of major markets to Bitcoin price, traders will also be closely watching the opening bell later this morning to see if this has any bearing on the top cryptocurrency.
Bitcoin daily price chart. Source: Coin360
As the price of Bitcoin dropped, a number of top-10 altcoins mirrored the losses. Ether (ETH) pulled back 2.40%, Litecoin (LTC) lost 4.33% and EOS dropped by 3.16%.
The overall cryptocurrency market cap now stands at $191.7 billion and Bitcoin’s dominance rate is 64.1%.
