The Bitcoin (BTC) price failed to break the resistance zone by $10,000 and corrected almost 10% in one day. The drop occurred on the same day that the US stock markets experienced a substantial decline. According to Coinmarketcap, Bitcoin Evolution market capitalization is currently USD 174,002,630,178.
These movements made investors and traders automatically fear the continuation of this correlation. However, is the fear that the price of Bitcoin will continue to fall if the shares are corrected justified, or did the correction of the Bitcoin price come after multiple rejections at $10,000?
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Crypto market daily performance
Daily performance of the crypto market. Source: Coin360
Rejection at $10,000 forces Bitcoin price to drop support levels
BTC USD 1-day chart
The daily chart of the BTC/USD shows a clear rejection of the $10,000 resistance, after which there was a substantial drop.
However, the primary trend remains valid and can be classified as an uptrend. The simple reasoning is that the price of Bitcoin has been hitting higher minimums since the big drop on March 12 when it reached $3,700.
The uptrend is indicated by higher minima and support/resistance reversals. In this case, the most recent minimum is the $8,600 level. For the market to hold up, it is essential to maintain the upward momentum through a higher minimum above $8,600.
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In this scenario, the main area to maintain is the USD 9,050- USD 9,300, as it has already served as support after the most recent fall.
This is significant because it is a crucial area that presented many fundamental tests in the previous year. For example, the area of $9,050 to $9,300 provided support between July-September 2019.
XBT USD 1-day chart
In that sense, the green zone between $9,050 and $9,300 can be marked as crucial for the direction to be taken. If the Bitcoin price falls below the green zone and confirms it as resistance (through a bearish rejection), it is likely that the market will be inclined towards a longer decline towards the $7,000 area.
However, if the price maintains this zone as support, it is likely to present a continuation of the upward trend.