After several days of tumultuous trade, in which the values of Bitcoin and other altcoins tested several crucial support levels, calm seems to be returning to the cryptocurrency market. After several days of consecutive southward slides in which it broke the crucial support level of $8,000, Bitcoin convincingly bounced back to above $8,200 on September 27.
At the time of writing, Bitcoin price was at $8226.83, a good bounce back from the recent low of $7,932. On September 26, Bitcoin started at $8,431. But unfortunately, by 15:50 UTC, Bitcoin price had dropped below the key $8,000 support level to $7,932. By the end of the day, Bitcoin managed to finish slightly higher — $7,991 — but still below the important $8,000 level.
But on September 27, Bitcoin managed to shake off the mood of doom and gloom in the crypto markets by bouncing back above the $8,200 level, thereby helping to bring some much-needed calm to the overall market sentiment. Friday was a better day because Bitcoin managed to stay above $8,000 for most of the day and finally broke above the $8,200 level to reach the intraday high of $8,244.
As for the altcoins in the top 20, Ethereum (ETH) price was at $172.38, Litecoin at (LTC) $54.94, XRP at $0.2397 and Bitcoin (BCH) cash at $219.35. The only one in the red was Monero (XMR). As for the biggest gainers among the top 50 crypto assets, the biggest gainer was Zcash (ZEC), which was up over 12.27%.
The Bitcoin price recovery to reclaim $8,000 as support was important to avoid a steep pullback down to the low $7,000 region and potentially the mid-$6,000 area. Subsequently, technical analysts anticipate Bitcoin and other major crypto assets to recover in the short term.
According to some analysts, the sell-off of Bitcoin in recent weeks was triggered by holders of newly acquired BTC, indicating that investors with a long-term thesis, known as “hodlers,” did not capitulate in the face of a cascade of long contract liquidations on BitMEX, which intensified the downward movement.
When the Bitcoin price initially fell below $9,000, crypto data aggregator Datamish showed that more than $650 million worth of long contracts on BitMEX were liquidated. In the days that followed – especially as BTC dropped below $8,000 – upwards of $100 million worth of long contracts were liquidated, bringing the total to about $750 million.
According to some experts, the Bitcoin price could tag the $7,600 level and initiate an upward movement afterward. Considering that $7,700 has also historically been a level of strong price action and support, as some prominent traders emphasized, it is possible that the $7,700 level is acting as a short-term bottom for BTC, at least for a while.