Bitcoin and Ethereum Show Signs of Recovery Despite Recent Correction

Key Takeaways

  • Bitcoin dropped below the $10,000 support level for the first time in over a month.
  • Meanwhile, Ethereum crashed to $307, representing a 37% correction from the recent yearly highs.
  • Despite the significance of the downturn, these cryptocurrencies could be about to make a come back.

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Bitcoin and Ethereum incurred significant losses over the past few days, dropping to crucial support levels. While market participants continue to put out fires due to the recent downturn, different technical metrics suggest everything’s not lost.

Bitcoin Seems Poised to Rebound

On Sept. 2, on-chain data analytics provider CryptoQuant registered a significant spike in the number of Bitcoin being transferred to different cryptocurrency exchanges.

The company affirmed that the large exchange deposits originated from addresses related to various mining pools, including Pooling, Slush, and HaoBTC.

The sudden spike in the number of BTC moved to exchanges was quite unusual, and it suggested that these mining companies were preparing to sell their tokens, according to CryptoQuant.

Miner Addresses Balance by CryptoQuant
Miner Addresses Balance by CryptoQuant

Indeed, an essential number of sell orders were placed across different exchanges after the flagship cryptocurrency was rejected from the $12,000 resistance level. The rising selling pressure led to a 19% correction that saw Bitcoin drop below the $10,000 support level.

BTC went as low as $9,813, which is the lowest price point it has been since late June.

The downswing allowed Bitcoin to retest the multi-year trendline that was previously acting as resistance and rejecting any upward price action since late December 2017. Given the strength that this trendline showed over the last three years, it is reasonable to assume that it will now serve as strong support.

Bouncing off this crucial hurdle can be seen as an extremely bullish sign that may help the uptrend to continue.

Bitcoin US dollar price chart
BTC/USD on TradingView

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