Bitcoin Price – BTCUSD Down Over 9%; Support at $6,800.00 Eyed

Bitcoin price slumped in Sunday’s trading on risk aversion sparked by the oil price war between OPEC+ countries. BTCUSD opened yesterday at 8,901.36 and closed over $860.00 lower at $8,307.76.

Over the weekend, Russia turned down the request by Saudi Arabia to cut production by 1.5 million barrels per day. The proposal was meant to provide support for oil prices which have lost over 20$ in value since January amid the coronavirus outbreak. In response, Saudi Arabia cut its oil price to Chinese clients by $7 per barrel and ramped up its production. This is interpreted as an effort by the country to recapture market share.

Consequently, these developments sparked risk aversion and safe haven assets like the US dollar benefited from the market’s risk off mode.

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Bitcoin Price Outlook

On the daily time frame, we can see that the recent drop in bitcoin price was enough to complete the head and shoulders pattern on BTCUSD. In forex trading, this is considered as a bearish reversal indicator. It has already broken through a confluence of support around $8,400.00. Namely these are: the neckline, 100 SMA, and rising trend line (from connecting the lows of December 18 and January 3). It’s not difficult to imagine bitcoin price dropping to its December 17 lows around $6,620.00.

On the other hand, if there are still buyers in the market, we could see bitcoin price recoup some of its losses. A bullish close above the 200 SMA at $8,693.00 could mean that BTCUSD may soon retest last week’s highs at $9,200.00.

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