After the market crash on Thursday, the future of a further drop in Bitcoin seems to be a bit brighter according to CoinDesk.
The biggest digital currency in the world has been staying relatively steady over the past month but on Thursday there was a massive drop bringing the price down below the $6,500 mark and to the $6,200 level confirming a range breakdown.
The technical indicators on the daily chart were also a bit slow and validating a negative moving average crossover on the long duration charts as was mentioned yesterday over several news outlets.
The bears basically took control around 24 hours ago and they made sure they kept it over the past day. Moreover, the bearish case is now looking a bit more solid than it did a day ago due to a few key signs.
Trading volumes on Bitfinex surged to a five week high yesterday however the total trading volume across all digital currency exchanges jumped by over 35% leaving it at $5.18 billion which is the highest level since the back end of September.
With trading volumes jumped means a greater reliance can be placed on the bearish move. This ties in with a big drop in volume and can be considered a big negative sign.
Bitcoin saw a Bollinger band breakdown yesterday and also broke the support of the trendline taken from the low at end of June and the low from the start of August.
This will probably start encouraging the bears with the trendline putting the brakes on several occasions on the sell-off in the first half of September. The trendline is also now staying as a hard resistance at the time of writing.
Long positions tanking
The high volume of Bitcoin’s drop was joined by a ten percent dip in the BTC/USD long position and a 7.4 percent increase in the short positions on Bitfinex of BTC/USD.
A break below vital support suggests a scope for a deeper sell-off, especially when accompanied with long positions and a jump in short positions.
According to CoinDesk:
“It seems safe to say that for BTC, the path of least resistance is on the downside. As of writing, it is changing hands at $6,312, representing a 0.9 percent gains on a 24-hour basis.”