Profit-taking and long liquidations are some of the factors behind Bitcoin falling back below $26,000 on Sep. 8.
Bitcoin (BTC) price dropped a modest 1.75% on Sep. 8 to nearly $25,850, wiping out almost all gains just hours before.
Bitcoin price sees technical correction
BTC price has struggled for direction in September, fluctuating between small gains and losses amid decreasing liquidity supply.
Traders’ indecisiveness is primarily due to an ongoing spot Bitcoin ETF delay and, as ARK Invest warned, the uncertainty regarding the Federal Reserve’s interest rate decision this month.
So, Bitcoin price has been trending inside a narrow trading area (the red zone in the chart below), defined by $26,450 as resistance and $25,550 as support. That has likely prompted traders to buy at support and sell at resistance.
The same strategy is likely behind the Sep. 8 selloff, wherein a lack of buying momentum near the $26,450 resistance promoted the BTC/USD pair to pull back.
A bump in exchanges’ Bitcoin reserves
Furthermore, a minor bump in the exchanges’s BTC balance has likely also played a role in the price slide.
Notably, these Bitcoin reserves have increased from over 2.03 million to 2.05 million BTC so far in September. Simply put, the more BTC on exchanges, the more potential pressure on the market.
Long liquidations
The duration of Sep 8. Bitcoin selloff triggered a wave of long liquidations in the derivatives market.
Notably, the spot BTC price decline has caused $7.78 million of long liquidation so far into Sep. 8. In other words, traders were forced to their Bitcoin collateral to recover the borrowed amount, intensifying the market’s selling pressure.
Where is BTC price heading next?
Technically, the Sep.8 selloff has pushed the Bitcoin price below its 50-4H exponential moving average (50-4H EMA; the red wave in the chart below).
ThIs move increases the BTC’s possibility of continuing its downtrend toward $25,550 in the coming days. This level coincides with a support confluence comprising a horizontal level (the lowest end of the red bar) and a descending trendline (blacked).
Related: Why is the crypto market down this week?
Conversely, reclaiming the 50-4H EMA as support can position BTC/USD to retest $26,000 for a potential breakout. In this case, BTC price could rally toward the 200-4H EMA (the blue wave) near $26,975 in September.
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