Bitcoin (BTC) price has had a volatile start to the week. Asia kicked off the trading week with a 4% selloff that brought Bitcoin price from $8,050 to $7,700. The ball was then passed to the Europeans who started a rally which continued through to the New York trading session. By the end of the US trading day, Bitcoin had rallied 8% from the bottom to highs of $8,325, which was near a 3.5% gain for the day.
The crypto market has largely been following the risk-on price action today, with traditional markets moving higher and commodities moving lower.
Bitcoin closed below the 200 days Simple Moving Average on 26 September is a decisively bearish signal. This is also a key area for Bitcoin and should act as an intermediate support. At the very least it is an â€˜auto-buy’ zone for many investors.
It remains to be seen what the real market sentiment is, Bears are defending the 200-SMA resistant. A daily closed above here will attract new buying to push price back above the "Descending Triangle" neck-line of $9,146.89 or risk price falling towards the price objective of $4,500.
Meanwhile, the bulls are waiting to see if price manage to trade back above the 200-SMA level for buying opportunity, so it is unsurprising that Bitcoin is experiencing volatility.
Overall, the Bitcoin market is in a state of uncertainty. There is clearly buying interest in the low $7,700, but the weekly timeframe illustrates a critical technical breakdown. It is likely that there will be significant volatility ahead given the situation.
Bears will be looking to aggressively short bounces and bulls are appearing to be patiently waiting to buy the dip.
If the bullish buying is to be exhausted and absorbed by the bears, there will likely be continued downside. As the block reward halving looms, miners might begin sweating as the higher cost of production could result in lower realizable marginal revenue.
What is certain is that the next couple of weeks will be decisive for the remainder of the year and possibly longer.