The biggest flash crash we’ve seen this year has sent bitcoin price plummeting today, along with the rest of the altcoin market. A $31 million sell order placed during the early hours appears to have kick started this heavy correction, but how long can it go? Let’s take a look.
Bitcoin Price 4-Hour Chart
Bulls showed weakness yesterday foreshadowing a potential drop, Bitcoinist predicted yesterday, which is exactly what happened.
On the 4-Hour BTC/USD chart we can see that panic selling has completely taken over the Bitcoin market after a heavy sell-off occurred during the Asian trading session this morning.
The sell order, which was executed over a 2hr period between 03:00 – 04:00 (UTC+1), managed to drive Bitcoin’s price down an eye-watering $1,780 (-22%) to the $6,200 level.
Bullish traders, however, were quick to snap up the bottom and helped to re-establish the $7,300 within minutes of the crash taking place.
Looking at the price action, we can see that BTC buyers were unable to defend the $7,300 level for long, particularly as the European trading session started.
Now, bullish traders are attempting to prop up the asset’s rapidly declining value at the psychological $7,000 level. This is a highly critical moment for Bitcoin, as a fall below this level could trigger a new wave of panic selling towards much lower levels.
On the 4H MACD, we can see some worrying signals of increasing bearish momentum, which suggest the $7,000 may not hold for much longer. For the first time since April, the 12-MA has now crossed below the signal line which is indicative of a trend reversal. Selling volume on the histogram has also increased dramatically.