A rally followed by a massive drop – what is currently happening to the price of Bitcoin?

A rally followed by a massive drop - what is currently happening to the price of Bitcoin.

In six days, the value of Bitcoin rose by more than 19% after falling by almost 10% in one day. What is causing such great turbulence in the market and what to expect in the coming days?

Huge movements

Since our last analysis, a lot has changed on Bitcoin’s chart. The scenario we paid close attention to has also come true. It turns out that the bullish RSI divergence we indicated on the daily chart, was played out almost immediately. Divergences entering the oversold zone show particular strength, which in this case made itself known. 

The result was that Bitcoin made a six-day rally, rising more than 19%. This rise ended near the long-term downtrend line, which is once again respected. The discounts quoted on Tuesday, September 13 caused BTC to once again defend the key $20,000 level.

At the moment, we do not observe any particular anomalies on the chart. MACD has lost its bullish momentum and is heading downward. In turn, the RSI has fallen below the 50 level. This one usually corresponds to a key support or resistance point. As a result, in the current situation, the 50 level on the RSI index is likely to be a difficult obstacle to overcome. Combining the two factors, it can be assumed that the leading cryptocurrency is in for a consolidation.

Macroeconomic manipulative factors

Last week’s speech by Jerome Powell, which manifested a decidedly hawkish attitude towards financial markets, resulted in the start of a Bitcoin rally. This situation is not typical. However, it must be admitted that the market did not expect a different message than the one it received. So the process of buying the fact began, after the earlier selling of the rumor. It was unusually strong, but nevertheless ended with the publication of data on the amount of CPI inflation in the United States. This one came in at 8.3%, higher than economists’ predictions of 8.1%. Despite the fact that there was a de facto decrease compared to the previous month’s data (8.5%), the market decided to react very strongly to this information. This kind of scenario, when negative news pushes the price upward, encountering another potentially negative news derivative of the former, may indicate market manipulation. 

Bitcoin in the wake of SPX

This is not the first time that declines in the cryptocurrency market have been pushed by the same movements in traditional markets. With this, it is worth noting the behavior of the US SPX index. 

On September 13, a massive sell-off appeared on it, reducing the value of the index by 4.32%. At the time of writing this analysis, we observe that the SPX is bouncing off the 0.236 Fibo level. This is a key area to defend. Its breakout has the right to result in an attack on this year’s new lows. However, we expect that, as in the case of Bitcoin, the market will face consolidation.

The MACD has temporarily lost bullish momentum, and the RSI has fallen below the 50 level, and it’s time to retest it from below.

Bitcoin’s dominance with a false breakout

In the last material, we also drew attention to Bitcoin’s dominance, which reached a surprisingly low level. We suggested that this could be a false breakout. It did, and BTC.D is back above 40%.However, it is worth remembering that often-touched support loses its strength over time.

Disclaimer: Blockbulletin does not take accountability of investments based on the information of the website. We highly advice readers to make extensive research prior to any invest

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