The cryptocurrency market experienced a noteworthy pullback on Jun. 11 with Bitcoin falling to as low as $9k before finding a bounce.
This recent market pullback coincided with a similar retraction in global equity markets. It appears the narrative in both the crypto and traditional stock markets has somewhat changed from potential recovery and reopening of economies post-lockdown to a potential second COVID-19 wave.
As expected, Bitcoin’s correction by nearly 10% in 24 hours made investors fearful of a further price plunge, and it now seems that the BTC price will continue to drop if U.S stocks correct further.
What Caused The $800 BTC Price Crash?
A Bitcoin correction has been well overdue after multiple rejections at $10K, which could give some clues to what occurred during the Jun. 11 drop.
Essentially, the price of Bitcoin was acting inside a very narrow range, through which such compression usually ends with volatility. When the compression period ended, a false breakout (fake-out) took place before any real move could occur.
Before the sudden crash, BTC tried to break above $9,850, but instantly got rejected at $10,000, causing the price to drop to about $9K.
In the near term, while a Bitcoin correction may be difficult, it will be the beginning of a new bottom formation that will act as a platform for a rally into the second half of the year.
Bears Defending the Resistance Zone at 10,000 – $10,500
At the time of writing, Bitcoin is trading at $9,405 with notable levels of support at both $9,000 and $8,830. This clearly indicates that the bears are defending the overhead resistance level between $10K and $10,500.
Breaking below the $9,000 zone could point to a change in market sentiment with possible downside targets developing at about $7,100, with a slight possibility of a bounce at $7,800.
On the other hand, if the bulls can scale the price above the 20-day moving averages, another attempt to climb the $10K zone is likely. If successful, BTC could pick up momentum and start the next leg of the sustained uptrend.
ETH Bulls Continue To Press against Critical Resistance
ETH broke out above the $247 resistance level on Jun. 10 but was unable to sustain it, ending Thursday trading at $230.02.
The top altcoin then rose by 0.25% on Saturday following on from a 3.21% rally on Friday, which led the coin to end the day at $238.17.
Currently, ETH bulls are attempting to push the second-ranked crypto back into the ascending channel. ETH is hovering at the $237 level at press time.
Looking ahead, Ethereum remains well supported by dip-buying interest as the cryptocurrency presses against key trend line resistance. If bulls can drive the price above the downtrend line, a rally to $253.556 is possible.