Over the weekend, the Bitcoin price rose to as much as $8,200 before the eagerly anticipated close of the week. Although it was the first strong breakout since November 2019, there was not enough buying demand to drive BTC to a higher level.
Many traders expected Bitcoin to hit upper resistances including $9,000 supported by the upward momentum of the last three days. As the weekly candle closed below $8,500, Bitcoin breached the $8,200 to $8,400 range and dropped back to around $8,050.
The decline of $8,200 could lead to a larger withdrawal of Bitcoin
The Bitcoin price is only about $120 lower than the weekly price. But BTC’s inability to rise well above $8,400 could indicate that BTC may decide to test lower supports.
When the Bitcoin price initially rose to $12,000 in July, there was considerable buying demand and volume on the major crypto exchanges to support the breakout. Even then, over the course of a month, it declined and dropped back to the $8,000 mark.
Bitcoin’s recent breakout into the $8,200 to $8,400 range, coinciding with lackluster volume and low buying demand, may suggest that the entire move may have been a fakeout.
Even Ethereum is fading under the pressure
As noted by Three Arrows Capital CEO Su Zhu, there was clearly significant demand for Ethereum in the $140 to $143 range on major exchanges such as OKEx.
Despite rising buy orders on major margin trading platforms, the Ethereum price fell below $143 as BTC moved closer to $8,000. With a decline of around 40 percent from its 2019 high, Bitcoin is still technically in a downward trend. In a bear market, Altcoins, even major crypto currencies like Ethereum, tend to follow Bitcoin’s price trend.
If the price of Bitcoin falls to lower supports in the coming weeks, as some technical analysts expect, the Altcoin market is unlikely to maintain its momentum, regardless of buying demand in the lows.