Markets Update: Bitcoin Breaks Below $4000 During 12% Sell-Off

Bitcoin has broken below $4000 USD following a sudden 12% sell-off. The dump occurred following the establishment of a third point of contact on a descending trendline from the all-time high of approximately $5000 USD, amidst speculation that China’s government may move to suspend the operation of some Chinese bitcoin exchanges.

Also Read: Chinese Cryptocurrency Exchanges Delist ICO Markets

The Dip Appears to Have Been Triggered by Rumors That China’s Government Will Temporarily Suspend the Operations of All Chinese Cryptocurrency Exchanges
The bitcoin markets are again testing the $4000 USD support area following a 12% drop, with prices currently hovering between approximately $3900 and $4000. The dip appears to have been triggered by rumors that China’s government will temporarily suspend the operations of all Chinese cryptocurrency exchanges coupled with the establishment of a third point of contact on a descending trendline from the recent all-time high of approximately $5000 USD.

The dip comes after a choppy fortnight of consolidation between the $4000 – $4500 USD area. The consolidation yielded several significant bullish indicators, likely contributing to yesterday’s sell-off. Notably, the bounce from $4000 USD to $4600 USD that immediately followed the retracement from $5000 USD produced signs of bearish volume divergence.

Looking at the markets from a longer-term perspective we can see that the recent dip in price comprises a retracement from the 1.618 Fibonacci extension to the 1.0 Fibonacci extension, when measuring from the $1000 breakout area to the previous high of $3000, and back down to the low of $1820. One can also see signs of divergence when looking at the stochastic RSI on a weekly chart.
https://news.bitcoin.com/markets-update-bitcoin-breaks-below-4000-during-12-sell-off/?=Telegram%20Channel