Bitcoin was heading lower on Tuesday as concerns over a potential $37 million dump grew over traders’ consciousness.
The benchmark cryptocurrency hit a new weekly low at $9,116.35 during the early European session, down 5.23 percent from its year-to-date peak of $9,619.95, established Monday. Meanwhile, CME Futures linked to bitcoin plunged by up to 6.13 percent to $9,190.
The plunge took place in the form of a wider bearish correction, after bitcoin’s wild upside price rally in January 2020. The cryptocurrency had surged higher against a series of geopolitical and macroeconomic events, starting with the US-Iran conflict, followed by the Coronavirus epidemic in China.
The virus fears led global stock markets to register fresh 2020 lows, with CSI 300 of Shanghai- and Shenzhen-listed shares suffering its biggest daily sell-off in more than four years. The downside risks in equities helped safe-havens, including gold and bitcoin, to maintain their early January gains.
The cryptocurrency failed to breach a key resistance area near $9,500, signaling the possibilities of a deep pullback in the coming sessions. Atop that, traders are now weighing the possibility of a big bitcoin dump.
4,000 Bitcoin on Sale
The United States Marshals Service (USMS) on Monday announced that it is going to auction about 4,000 BTC (around $37 million) on February 18. The announcement led analysts to consider that the trade would lead to a dump.
Youtuber Sunny Decree, for instance, ran a special coverage, implying the possibility of bitcoin losing at least $37 million worth of valuation on or after the auction. He feared that an undervalued bitcoin bid could lead the buyer to dump his/her entire stash on the retail market, on which the bitcoin is trading at higher rates.
“Not everyone out there is a fundamental HODLER,” reminded Mr. Decree.
A Technical Correction Underway, Anyway
As NewsBTC covered earlier, there was a higher probability that bitcoin is trending inside a Rising Wedge, a bearish continuation pattern.
However, the price would break out from the Wedge range upon hitting its apex, to the downside. Such a move could crash bitcoin to approx $7,000.
On the other hand, a break above the Wedge would have bitcoin eye a close above $10,000.
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