Bitcoin Price Reclaims $9,300 as Traders Expect Increased Volatility
Since briefly tumbling below $9,000 on June 24, Bitcoin (BTC), the top-ranked digital asset on CoinMarketCap recovered today to trade in the $9,300 range again. The swift recovery occurred as traders continue to anxiously await the result of a record-breaking $1.06 billion Bitcoin options and futures contract expiry.
While the digital asset remains in an uptrend, the start of this also week saw stocks correct sharply as the dreaded second wave of coronavirus infections spread throughout many of the U.S. states which choose to re-open their economies in mid-March.
As investors have come to expect, Bitcoin price dropped alongside equities markets and according to Cointelegraph contributor Marcel Pechman:
“The recent increase in correlation between Bitcoin and the S&P 500 could be the root of BTC’s current price volatility.”
Crypto market weekly price chart. Source: Coin360
Since early May Bitcoin price has experienced a number of rejections near the $10K mark and on the drop to $9,100 on June 11 began a trend where the price has traded in a sideways range instead of the pattern of successive higher lows which began right after the Black Thursday crash on March 12. Despite Bitcoin losing a bit of momentum, investors have continued to buy into nearly every dip but there is also increasing fear that the price could drop below $8,800 to revisit prices in the $8,500-$6,800 range.
Currently the Crypto Fear and Greed index, a metric reflecting investor sentiment on the state of the market, reads 40 which is in the ‘fear’ category.
Crypto Fear & Greed Index. Source: Alternative.me
Typically aggressive investors counter-trade the indicator, hence the buying of last night’s dip, but the current reading could also be reflective of the apprehension traders have ahead of the June 26 BTC options expiry.
BTC USDT daily chart. Source: TradingView
As can be seen on the daily chart, the price continues to meet resistance and the trendline from the local high at $10,360. BTC is finding support at the $9,200 level and below this from $9,000-$8,800 is a zone the price has revisited multiple times since late April.
As shown on the volume profile visible range indicator, a drop below the high volume node at $8,670 could lead the price to revisit the 200-MA at $8,300 but there is also a volume gap in this area so drop to $7,200 could occur.
If Bitcoin can push above the descending trendline to manage a daily close above the 20-MA ($9,500) then the digital asset will aim to flip $9,800 from resistance to support, placing a go at $10K back on the table.
The short time-frames tell a similar story, showing that the price needs to secure a 4-hour candle close above $9,300, followed by a push above the descending trendline and 20-MA.
Short-term price action aside, most traders will have their attention focused on whether or not the upcoming 1.06B BTC options expiry will introduce additional volatility.
Bitcoin daily price chart” src=”https://dailybitcoinupdates.com/wp-content/uploads/2020/09/b56ad392404fd0fcf60a51330b8d0772-2.jpeg” title=”Bitcoin daily price chart”>
Bitcoin daily price chart. Source: Coin360
Altcoins also took a beating as Bitcoin price fell below $9K which is expected but a handful of the mid and large-cap altcoins also quickly recovered as BTC reclaimed its previous range.
Basic Attention Token (BAT) and Ontology (ONT) popped back with a 6.78% and 4.78% gain while Chainlink (LINK) managed a 2.46% recovery. DeFi token Compound (COMP) surged 13.47% after listing on Binance today.
According to CoinMarketCap, the overall cryptocurrency market cap now stands at $261.4 billion and Bitcoin’s dominance rate is 64.4%.
