The Bitcoin price dropped more than $400 early on Thursday, 3 Sep, triggering alarm among the bulls who were already struggling against a two-day sell-off.
The steep drop was somewhat expected, though, considering that there was an inflow of more than 90,000 BTC from whales to some of the largest crypto exchanges just a day prior.
Data from blockchain analytics platform Chainalysis suggests that it was the highest single-day rise in more than a month, thus giving the impression that many traders were keen on selling at near $12,000.
BeInCrypto technical analyst Valdrin Tahiri delved into the possible causes that may have triggered today’s sharp drop of the BTC/USD pair (along with the possibility of further price drops). Continue reading for more on that and other big stories from the day in BeInCrypto’s cryptocurrency news roundup for Sept 3.
What Caused Bitcoin to Drop so Quickly? [Analysis]
On Sept 2, the price created a bearish engulfing candlestick that took the price back to the support area around $11,200. The decline took place with significant volume, increasing the legitimacy of the move. If the price were to decrease from this support area, the next would be found near $10,800.
This area contains multiple low wicks from the beginning of August. On the daily time-frame, technical indicators do not show signs of a reversal yet.
- The bitcoin price has returned to the $11,200 support area.
- Technical indicators are neutral.
- The price is likely to still be in wave 4 of a five-wave impulsive formation.
Compound (COMP) Drops Sharply After Reaching All-Time High
The COMP price has been increasing at an accelerated rate since Aug 25 when it reached a low of $161. The rally continued until Sept 1, where COMP reached an all-time high of $272.61.
The price dropped sharply the next day and is now nearing the minor support area at $205. If this level fails, the next support would likely be found at $160. Technical indicators provide a mixed outlook.
Dutch NGO is Sending Bitcoin Aid to Protestors in Belarus
A Netherlands-based NGO is reportedly using bitcoin to support protesters in Belarus in their struggle against the controversial Belarusian government. Yaroslav Likhachevsky and Alexey Kuzmenkov, the tech entrepreneurs who founded the NGO, are themselves of Belarusian origin.
The duo is part of a group that fears that the Aug 9 presidential elections were rigged. Newly elected leader Alexander Lukashenko appears to be suppressing any voice of dissent using police brutality.
Hedge Asset Prices Don’t Predict Inflation, Says BOE Analyst
Gertjan Vlieghe, an analyst at the Bank of England, has taken a contradictory stand on the widespread perception that gold prices can serve as a reliable indicator of future inflation.
Vlieghe, who previously served as a bond expert at Deutsche Bank AG, argues that any increase and decrease in hedge assets reflects investors’ sentiment regarding the potential for inflation.
Vlieghe is part of a group of analysts representing the Bank of England who have been assigned the responsibility to study the impact of COVID-19 on the economy to determine future stimulus measures. Their testimony also revealed that the U.K.’s gross domestic product (GDP) would likely fall at least 9.5% this year.
EOS Seeks Continuation Rally Above $3
For EOS, the $3 area is an important support level on the daily time-frame since it previously acted as resistance and has acted as support four times after. However, technical indicators do not indicate that a reversal is near: the MACD was increasing, but failed to cross into positive territory and has fallen once again.
The Stochastic RSI is oversold but rejected a bullish cross. The RSI is below 50 and has not generated any bullish divergence.
Australian BitConnect Promoter Banned From Financial Services
Former BitConnect promoter John Bigatton has been banned by the Australian Securities and Investment Commission (ASIC) from offering or aiding in any financial services for seven years.
The ban is for Bigatton’s role in encouraging investors to put their money into the famous Ponzi scheme. Criminal investigations and lawsuits focused on BitConnect remain ongoing.