Bitcoin, the flagship cryptocurrency, has recently seen its price dip below the $6,300 mark as it’s seemingly getting ready to retest this year’s key support level at $6,000. A little-known technical indicator, however, is suggesting it may be broken.
According to Bloomberg, the GTI Vera Convergence Divergence indicator, which eliminates the noise in the traditional MACD to detect trend reversals and exhaustion, just ended its “longest buy streak since July,” which suggests the cryptocurrency will keep dropping.
According to CryptoCompare data, BTC is now trading at $6,230 after dropping 1.3% in the last 24-hour period. Since it dropped over $1,000 in 24 hours after a whale moved $100 million to crypto exchanges, the cryptocurrency has been trading below its 50-day EMA, which has seemingly been acting as a resistance.
The drop comes shortly after the US Securities and Exchange Commission (SEC) ordered the temporary suspension of trading in the securities Bitcoin Tracker One (“XCBTF”) and Ether Tracker One (“CETHF”) over “confusion amongst market participants regarding these instruments.”
It’s worth pointing out the GTI VERA Convergence Divergence indicator has, last month, suggested that bitcoin’s selloff was close to an end, at a time in which the cryptocurrency was trading at about $6,400. While the cryptocurrency has since then come close to the $7,000 mark, its bearish trend wasn’t reversed.
Notably, bitcoin and the cryptocurrency ecosystem have been seeing various positive developments. As CryptoGlobe covered Citigroup recently came up with a new mechanism called “Digital Asset Receipt” (DAR) to invest in cryptocurrencies and Nasdaq, the world’s second-largest stock exchange, is reportedly looking to add crypto price prediction tools.
Bitcoin Futures Volumes Drop
While the cryptocurrency has been seeing positive developments, bitcoin futures contracts have been seeing their trading volumes drop. On Monday, September 11, they recently hit a monthly low as only 1,965 contracts changed hands on the Chicago Mercantile Exchange (CME).
As MarketWatch noted, this means trading volume is down nearly 29% from Friday, September 7, and down about 72.2% from one month ago.
Speaking to the publication Kevin Davitt, senior instructor at the Chicago Board Options Exchange (CBOE), said a break below $6,000 will see the cryptocurrency retest its year to date low, which would also see futures contracts hit a record low this year.
The September XBT futures bounced off those levels on numerous occasions over the last three months. If the market fails to hold the $6,000 handle, then traders will almost certainly eye the contract lows ($5,850) and all-time XBT futures lows of $5,755 on June 29.
Ethereum, the second-largest cryptocurrency by market cap, has been plummeting. It’s currently trading at about $170, after seeing its price drop 11.23% in the last 24-hour period as ICO projects and whales dump their funds.