Bitcoin lost over $1,000 of its trading price in just half an hour on Tuesday, 24 September. During the massive market-wide wipeout, Bitcoin, as well as the entire crypto sector, suffered a huge hit.
Despite the recent bounce-back for Bitcoin to test the $8,300 support zone, bulls have to push up to prevent falls beneath the $8,000 area. Likewise, Ethereum fell to $167 and bounced back in the $200 range for a short while.
According to experts, one of the main reasons behind Bitcoin’s plunge is the mysterious 40% drop in Bitcoin’s blockchain hash rate. Hash rate resembles the throughput of the network, measured in TH/s.
The other theory behind Bitcoin’s price drop is futures trading platform Bakkt issuing 113 one-day Bitcoin contracts. Others claim that the price drop is because of Bitmex liquidating contracts and margin calls.
Jeff Dorman, CIO of Los Angeles-based crypto asset management company Arca, stated that short-term trading prevents the sector from maturing. “Every spike in Bitcoin’s price is a resistance level, and every drop in the price is a support zone. The crypto sector is still short-term trading dominated”, Dorman added.
Dorman’s statement comes amid Bitcoin closing below its 100-day moving average for the first time since March 2019. In Q2 of 2019 Bitcoin’s price has grown to reach highs of $13,852, settling around the $10,000 mark in the last few weeks.
Looking at trading volumes, however, the numbers are increasing exponentially. Bullish sentiment is strong, so experts are awaiting strong resistances at $8,300 for Bitcoin and $170 for Ethereum.
Stablecoins, on the other hand, are seeing much more trading volume activity. Tether, for example, almost doubled its 24-hour trading volume, reaching nearly $37 billion as of press time. The interest is mainly due to stablecoins being a haven for crypto traders and a gateway for purchasing Bitcoin.
As of press time Bitcoin sells at $8,440.72 with a 12% decline in the past 24 hours. Ethereum’s trading price is $168,98, with a drop of 13 percent. Ripple is down 8 percent to $0,242.