Bitcoin price (BTC) fell 5% today to a new weekly low at $8,660, a point which is also below the 200-day moving average which has been acting as support since reclaiming it in the final week of October.
Almost all other crypto-assets have also suffered a valuation loss against the U.S. dollar, but there has been some resilience shown in both Ether (ETH) and EOS, which have continued to outperform Bitcoin over the last week.
Why BTC broke down from $9000
Bitcoin has been trading hard up against historical weekly support and resistance at $9,550. This also coincided with the 100-day moving average (DMA), unable to establish any kind of sustained attempt to break above.
The pinch between the 100-DMA acting as resistance and the 200 as support, led to a failure and an immediate drop through the volume gap where price doesn’t have much local history. The 50-DMA and the previous range high have subsequently come to support price above the 61.8% retracement from the move up to $10K from the mid $7K lows.
This is a technical trading area, which will be of interest to some profit takers and buyers. If Bitcoin is to maintain a move higher in the near term, we should expect to see BTC attempt to retake the previous support at $9,000.
This will be an important weekend for Bitcoin, which could easily lead to further volatility. Reclaiming the $9K range is a clear objective for the bulls over the weekend. Otherwise, a more extended period consolidating likely lies ahead in the $8,000s.