Simon Peters, cryptoasset analyst at multi-asset investment platform eToro, says: “Held as a support throughout August, the $11,300 level has now been broken, and bitcoin may still have a long way to fall. We can now expect a retest of $10,000 as a new bottom, which might also coincide with the 200 Daily EMA (Exponential Moving Average). From a technical point of view, that could bolster price action and prevent the price from falling further.
“There are a number of potential causes for the sell-off – chief amongst which is a dump from miners. Analytics platform CryptoQuant reported yesterday that mining pools had been moving higher than usual volumes of bitcoin onto exchanges. This is supported by data from Bytetree: collectively, miners’ net inventory over the last 24 hours is negative, meaning that more bitcoin has been sold or transacted than new bitcoin generated.
“Another potential cause is the news that South Korean authorities have reportedly raided and seized Bithumb, one of the country’s largest cryptocurrency exchanges by trading volume. The news will have spooked a number of investors holding crypto with them, many of whom will have either sold back to a fiat currency/stablecoin or (more likely) transacted their cryptoassets to another exchange.
“If there is a silver lining, it is this – that a drop back down to $10,000 could very well tempt some bulls who have been sitting on the sidelines to at last invest in bitcoin.”