Bitcoin Dropped Below $10K, 3 Reasons Bitcoin and Crypto Market Will Crash Again
Updated Sep 9, 2020, at 02:22 UTC
Technical analysis of bitcoin price
Bitcoin is the king of all cryptocurrencies, which can affect the crypto market overall. Bitcoin dropped below $10K yesterday and recovered above $10,400 at its highest today and slumped gradually. At press time, the Bitcoin price dropped around $10k again. This is similar to the price trend on Sept 5. After the price plunged on Sept 2 and 3, the bitcoin price consolidated around $10k. Both rebounds didn't even touch the 5-day moving average (MA) and 10-day MA which are now strong resistance levels for the bitcoin. We can see the 90-day MA, which was once the strong support level for the last downtrend, is a support level again and the bitcoin price is in a consolidation mode for a few days. But it is quite weak and the second dip is a high probability.
Sushi Price Analysis
It was apparent that the bull crypto market is driven by the overlap between internal and external factors; the economic stimulus plan which provided more money supply to the market and DeFi craze, especially the decentralized exchanges (DEX) like UniSwap and SushiSwap. The Ethereum and Bitcoin prices are pulled up by the DeFi craze. On Sept. 2, Uniswap’s trading volume has also surged recently, overtaking Coinbase by 20%. What's behind the UniSwap's huge trading volume is the contribution of SushiSwap. Like the impactTesla's stock has on the Dow Jones Industrial Average, SushiWap token has a similar influence on the crypto market.
The price of Sushi token reached 15.97 on its first day on Sept. 1, then the price crashed to 1.13 of its lowest price the following days. The Sushi token crash pulled down the bitcoin price and the whole crypto market. This also overlapped negative news "McConnell Raises Doubts on Congress Getting New Stimulus Done".
It was no doubt Sushi price will affect the overall crypto market trend again. As many speculations, manipulations and news on SushiSwap, its future is unsure.
It was reported that Sushiswap founder has exited "scam", then transferred control of the project to FTX's CEO. FTX was an exchange backed by Binance. The Sushi token incentive model is also controversial. The Uniswap's founder, Hayden Adams said, the Sushi project can be created within one day by any competent developer. we still don't know who is the real anonymous founder Chef Nomi and how is it connected to other exchanges. In addition, the war between centralized and decentralized exchanges, and the war among different decentralized exchanges and their forks, make things much complex.
It is no doubt the future of DEXs is promising. Exchange is the key to exchange values and trade. These DEXs removed the trust and reliance on "trusted third parties", which further transformed our trust into blockchain-based trust machines. But these uncertainties may have a strong negative impact on Sushi token price, which in turn would affect the crypto market.
Uncertainty of New Money Supply and its scale
As we have analyzed before, the bull of the stock market is driven by the new money supply, so was the crypto market. We can hardly say there will be a second bull market soon, given three conditions: (1) The second stimulus package and its scale are not sure. (2) There are enough profits for parts of investors. We can hardly get that much profit even in a bull market. Tesla’s price was trading around 70.10 on Mar. 18 and reached 502.49 on Sep. 1. This surge resulted in more than 7 times in value under the current economic turmoil. There were signals to cash out. the Tesla stock had plunged recently.
Opinions expressed are solely the analyst's own. You should conduct your own research before making a decision.
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