Bitcoin bearish correction continues to $9,500 hitting its lowest price in August. Why has BTC not yet bounced?
August 15, 2019 | AtoZ Markets - The cryptocurrency bearish move in August has continued as Bitcoin dived below the $10,000 psychological level. The $11,100 critical level couldn't provide any support. This move will be another hit on Bitcoin speculative buyers as many expected the current dip to be a minor one. However, it's turning more brutal on a light scale. After breaking below $10,000, the price will most likely head to the $9,100 support and make an attempt to break below it. Currently, BTC is retracing to the $10,000 handle.
Bitcoin bearish correction: technical overview
Of course, on a speculative ground, there was a big reversal expected after price completed a large hammer candles pattern on the weekly chart in the last week of June. The correction ended at $9,100 and then followed by a bullish engulfing pattern off the 9-day EMA from which price has bounced off twice this year. In a recent update, where we used the chart below, a big bull-bear battle was expected.
If the price breaks below the $9,100 low, a hit of $7,200 will be expected. Even before $9,100, a break below $10,000 would be a big threat to the bull. Price broke below $10,000 eventually which will most likely be sustained in the coming days.
Why the Bitcoin sell-off?
Beside technical outlook, are there other reasons to look at the current sell-off? A Chinese crypto venture capitalist, Dovey Wan, believes that the recent sell-off is as a result of a very huge Bitcoin Ponzi scheme that operate from China.
Dovey made a revelation of the largest crypto scam in China by the name PLUS Token. Victims were set back by 70,000 Bitcoin and 800,000 Ethereum. The scam created a fake wallet where investors sent their funds with the aim of getting high returns from the dubious platform. The scam which started in mid-2018 has 4 years of membership structure and claimed to have 10 million members. According to the police report, a whopping $3 billion was carted away by this program. $3 billion is more than 1% of the entire cryptocurrency current market valuation. Did you say 'WOW'?
Dovey also discussed how PlusToken is moving its funds with the following claims.
1. Plustoken started the transfer of their loots in early July to Bitrex and Huobi which was why the sell-off started around that time.
2. Plustoken is gradually dumping their funds in batches with 50-100 BTC per batch.
3. Chinese traders discover that someone has been dumping 100 BTC non-stop on Binance. She figured the dump might be related to this scam.
This may be the reason why Bitcoin is yet to bounce. With more panicking possibly coming, the bearish correction from $13,900 might just extend below $9,100 to $7,200.