Bitcoin, the world’s leading cryptocurrency, experienced a significant price decline on September 11th, as observed from the daily chart. The price of BTC dropped to $24,951, hitting its lowest point since the second half of 2023, before slightly recovering to $25,135. This sudden drop occurred during the early trading hours of the New York session, resulting in bearish implications for Bitcoin.
The sell-off on September 11th caused Bitcoin to fall below the consolidation phase it had been experiencing in recent trading days. This bearish breakdown not only canceled the bullish momentum from August 31st but also intensified the selling pressure that emerged on August 17th. The formation of a wide-ranging bear candlestick, coupled with above-average trading volume, suggests significant participation and reinforces the downward trend.
Analyzing the current price action, it is apparent that Bitcoin bears are firmly in control as they actively reverse the gains made between June and July 2023. During that period, Bitcoin’s price surged from around $20,000 to a high of $31,800 by the end of July 2023. However, discussions about a spot Bitcoin Exchange-Traded Fund (ETF) lost momentum when the Securities and Exchange Commission (SEC) delayed their decision.
As of now, Bitcoin has experienced a 20% drop from its lows in July 2023. Nevertheless, it is trading at critical Fibonacci retracement levels derived from the resistance levels between June and July 2023. Although cryptocurrencies often undergo deep retracements, there is a possibility that Bitcoin may find support around the $25,000 mark. However, if the selling pressure intensifies, BTC could break below this level and revisit the June 2023 lows near $20,000.
Technical analysts have detected a concerning development called the “Death Cross.” This pattern forms when the price of an asset closes below a certain threshold, which in this case is the $25,600 mark. The appearance of this pattern on the Ichimoku Cloud indicator signals a more prolonged period of price decline. Historically, Bitcoin has experienced price dumps following the formation of a “Death Cross.” Notable instances include June 2021 and January 2022, where BTC dropped by 19% and 23%, respectively.
If the anticipated “Death Cross” pattern materializes, Bitcoin could potentially experience a 21% decline, dragging its price back to the $20,000 level or even the June 2023 lows. However, before reaching those critical points, Bitcoin must first break through strong support levels at $25,600, $24,000, and $23,200. Only then can it retest the $20,300 zone, potentially revealing a more extended bearish trend.
Bitcoin is currently under immense bearish pressure, with the price plummeting and technical indicators signaling a potential downturn. The recent sell-off and subsequent bearish breakdown have weakened the position of the bulls, erasing their gains from the past few months. Although there is a chance for support around $25,000, further losses may push Bitcoin towards the June 2023 lows. Traders and investors should closely monitor the developments of the “Death Cross” pattern and the critical support levels to assess the future trajectory of Bitcoin.