The first week of September was quite bearish for most digital assets within the cryptocurrency market. Roughly $40 billion were erased from the total market capitalization, generating significant losses across the board. Among the cryptocurrencies affected was Bitcoin, which saw its price drop below the $10,000 for the first time since late July.
The flagship cryptocurrency kicked off the week on a good posture despite the substantial losses it incurred later on. Indeed, BTC opened Monday’s, August 31st, trading secession at a high of $11,716. Following the bullish impulse seen over the previous weekend, Bitcoin seemed to be poised to break out.
By Tuesday, September 1st, around 5:00 UTC, the bulls stepped in, pushing BTC’s price up over 3%. The spike in demand for the pioneer cryptocurrency saw it take another aim at the infamous $12,000 resistance level. Bitcoin rose to a high of $12,086 later that day, but this supply barrier strongly rejected the upward price action.
What followed was an 18.13% correction that extended towards the end of the week. By Friday, September 4th, around 14:00 UTC, the bellwether cryptocurrency had broken below the $10,000 support level and was trading at a low of $9,895.22, marking the lowest price point of the week. However, BTC did not stay there for long.
It seems like this price hurdle was seen as a “buy the dip” opportunity for many sidelined investors. The increasing buying pressure pushed Bitcoin back up by 5.88%, allowing it to regain the $10,000 level as support. BTC was able to close Friday trading at a high of $10,477.13. The downward pressure seen over the entire week caused investors a negative weekly return of 10.57%.
Ethereum Makes New Yearly Highs But Suffers Massive Rejection
As a new monthly candlestick opened, Ethereum showed signs that it wanted to break above $500. Indeed, the smart contracts giant entered Monday’s, August 31st, trading session at a low $428.92 and immediately began climbing. By Tuesday, September 1st, at 22:00 UTC, Ether had made a new yearly high of $488.95.
While the market seemed to have entered a FOMO state after such a milestone, data reveals that the so-called whales began dumping their tokens on unaware crypto enthusiasts. The substantial spike in selling pressure by these large investors was quickly reflected in prices. As a result, Ethereum entered a massive downtrend that was seen throughout the rest of the week.
The second-largest cryptocurrency by market cap lost nearly 27% of its market value after making a yearly high of $488.95. By Friday, September 4th, at 14:00 UTC, ETH had reached a weekly low of $359. Despite the rising number of sell orders behind this altcoin, the $359 price hurdle was able to hold and contain falling prices at bay.
The rejection from this critical support level resulted in an 8.19% upswing throughout the week’s last ten hours. The bullish impulse was able to send Ether up to close the week at a high of $388.21. Investors who held this cryptocurrency throughout the week came out with a negative weekly return of 9.44%.
Sitting on Top of Critical Support Levels
When looking at Bitcoin and Ethereum from a high time frame, it seems like these cryptocurrencies have tested critical support levels during the recent downswing.
For instance, BTC touched a multi-year trendline previously acting as resistance, rejecting any upward price action since late December 2017. Given the strength that this trendline showed over the last three years, it would likely serve as strong support now. Bounding off this crucial support level may help Bitcoin resume its uptrend, but breaking through it may see it plunge towards $9,000 or lower.
Ethereum, on the other hand, appears to have retraced towards the neckline of a “W” pattern that developed within its daily chart. Such a pullback to this support level is typical when assets form this type of technical formation. If Ether is able to rebound from this price hurdle that sits between $340 and $300, it would likely continue surging towards $800. However, slicing through it could result in further losses since the next significant support level sits around $260.
Konstantin Anissimov, Executive Director at CEX.IO:
This article was originally posted on FX Empire