Why Another Drop Below $9.4K Would Not Bode Well for Bitcoin Price

While the equity markets are taking a huge hit today, the cryptocurrency market and Bitcoin (BTC) price are remaining relatively stable over the weekend and into the start of this week. As the stock market pulls back traders will begin to speculate on whether the crypto market will react in a bearish or bullish manner. Is this just the calm before the storm?

One thing to note is crypto trading volume has drained away over the past few days. With volume going down, perhaps this is a signal that a big move will take place in the market soon.

Crypto market daily performance. Source: Coin360

Bitcoin price holds $9.4K as a crucial support

The recent retest of the $9,400 support level wasn’t as bearish as many analysts feared as the level held for support and confirmed the support/resistance flip. However, the price of Bitcoin remains stable since, which is causing the volume to drain away.

BTC USDT 1-day chart. Source: TradingView

BTC USDT 1-day chart. Source: TradingView

Bitcoin’s daily chart is showing a perspective similar to that of last week. The price is stuck within a range where $9,400 is the support and $10,400 is the primary resistance level to breakthrough. Currently, the price action is not giving a clear direction to the market.

However, the price moved from $6,900 to $10,400 since the start of this year and held the $9,400 level, which means that the price of Bitcoin is still trending upwards.

BTC USD weekly chart. Source: TradingView​​​​​​​

BTC USD weekly chart. Source: TradingView

The weekly chart of Bitcoin also shows an encouraging outlook. The weekly closed above the crucial level of $9,500 and is currently stabilizing. Is this bearish? No, not in particular. The price of Bitcoin has moved about 50% in six weeks thus a retracement and period of consolidation are natural and healthy for a market before it continues.

The key areas to hold for Bitcoin are the $9,500 and $8,800 areas on the weekly timeframe. If the price of Bitcoin can sustain support above these levels (preferably $9,500), a bullish continuation is still warranted.

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