Bitcoin price drops to $9.3K due to Coronavirus and overbought conditions
Wed, 26 Feb 2020, 07:52 am UTC
Bitcoin (BTC) price has dropped below the $9,400, which was labeled by analysts as crucial support, Cointelegraph reported.
On Feb. 25, bitcoin’s price dropped another 3.07% marking its second day of losses. The price is at $9,350. If the price will continue to drop below $9.089, the next level of support can be found at the 200-day moving average which aligns with a high volume VPVR node at $8,800. However, if that happens, it will discard approximately 16% of the 21% gain bitcoin has made since rising from $8,327 to $10,500 on Feb. 13.
According to the report, the losses in the crypto market came in tandem with coronavirus fears. The US benchmark S&P 500 index recorded its worst daily performance on Monday in the last two years while the European benchmark Stoxx 60 surrendered its 2020 gains to Coronavirus fears. The virus affects the sentiments of the investors and scares them away from the risk-on markets, News BTC reported.
Overbought conditions also affect the price of BTC. Bitcoin and altcoins had become overbought in the past weeks after crypto whales overbought crypto coins when bitcoin’s price moved up from $6,400 to $10,500.
According to crypto trader contributor Scott Melker, investors should consider that “The assets that are overbought and have had the largest recent gains are the ones that have the furthest to fall before finding meaningful support.”
Despite the bitcoin trend today, analyst Van De Poppe sees maturation in the whole process.
“This market is still highly speculative and conditions can turn on a dime, but taking a step back we are beginning to see some maturation as the level of sophistication across investors and traders increases,” he said.
“The latest rally in the crypto market is quite a bit different from what we saw last year when BTC led most alternative crypto assets. The shift in leadership this year has favored other large and mid-cap names, many of which drastically underperformed BTC over the last year.”
Bitcoin trading isn’t exactly the same as stock trading and it is not for the faint of heart. One has to understand the candlestick charts to predict future price rises and falls because buying bitcoin randomly is the easiest way to lose money.
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