Bitcoin was heading lower on Tuesday as concerns over a potential $37 million dump grew over traders consciousness.<\/p>\n
The benchmark cryptocurrency hit a new weekly low at $9,116.35 during the early European session, down 5.23 percent from its year-to-date peak of $9,619.95, established Monday. Meanwhile, CME Futures linked to bitcoin plunged by up to 6.13 percent to $9,190.<\/p>\n
Bitcoin pullback in play after validating $9,600 as resistance | Source: TradingView.com, Coinbase<\/p>\n
The plunge took place in the form of a wider bearish correction, after bitcoins wild upside price rally in January 2020. The cryptocurrency had surged higher against a series of geopolitical and macroeconomic events, starting with the US-Iran conflict, followed by the Coronavirus epidemic in China.<\/p>\n
The virus fears led global stock markets to register fresh 2020 lows, with CSI 300 of Shanghai- and Shenzhen-listed shares suffering its biggest daily sell-off in more than four years. The downside risks in equities helped safe-havens, including gold and bitcoin, to maintain their early January gains.<\/p>\n
In a defensive measure, the Peoples Bank of China announced that it would inject Rmb500bn (about $71 billion) of banking liquidity via reverse repo. The move improved risk-on sentiments and caused havens to register corrective declines. Bitcoin, whose correlation with gold grew to a four-year high in January, fell likewise.<\/p>\n
The cryptocurrency failed to breach a key resistance area near $9,500, signaling the possibilities of a deep pullback in the coming sessions. Atop that, traders are now weighing the possibility of a big bitcoin dump.<\/p>\n
The United States Marshals Service (USMS) on Monday announced that it is going to auction about 4,000 BTC (around $37 million) on February 18.The announcement led analysts to consider that the trade would lead to a dump.<\/p>\n
Youtuber Sunny Decree, for instance, ran a special coverage, implying the possibility of bitcoin losing at least $37 million worth of valuation on or after the auction. He feared that an undervalued bitcoin bid could lead the buyer to dump his\/her entire stash on the retail market, on which the bitcoin is trading at higher rates.<\/p>\n
Not everyone out there is a fundamental HODLER, reminded Mr. Decree.<\/p>\n
As NewsBTC covered earlier, there was a higher probability that bitcoin is trending inside a Rising Wedge, a bearish continuation pattern.<\/p>\n
Rising Wedge hints a bitcoin breakdown | Source: TradingView.com, Coinbase<\/p>\n
The pattern suggests that the BTC\/USD pair would continue its correction until it hits the Wedge Support. The same level coincides with the pairs 200-daily moving average, which makes it an ideal level to attempt the next upside retracement.<\/p>\n
However, the price would break out from the Wedge range upon hitting its apex, to the downside. Such a move could crash bitcoin to approx $7,000.<\/p>\n
On the other hand, a break above the Wedge would have bitcoin eye a close above $10,000.<\/p>\n
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