Bitcoin price plunges below support at $19K as volatility in the crypto market spikes
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(Kitco News) - Bitcoin (BTC) and the wider crypto market experienced a pullback in prices in afternoon trading on Tuesday alongside declines in traditional markets as investors digested the August ISM data, which came in stronger than expected at 56.9 instead of 55.5.
Data from TradingView shows that BTC price traded near support at $19,800 in early trading before dumping in the afternoon session to hit a daily low of $18,809 before bulls managed to put a halt to the decline.
BTC/USD 4-hour chart. Source: TradingView
Kitco readers had a fair bit of warning ahead of the price dump thanks to Senior Kitco market analyst Jim Wyckoff, who warned that “history shows the month of September can be rocky for the financial markets” in his morning Bitcoin update.
“Look for more volatility in the cryptos in the coming weeks,” Wyckoff cautioned.
Ethereum developments excited the market
The plunge in prices caught many traders in the market off-guard after a strong showing from the altcoins earlier in the day following the successful implementation of the Bellatrix hard fork on the Ethereum (ETH) network.
Not all were so enamored with this development; however, including crypto trader and pseudonymous Twitter user Crypto Tony, who posted the following chart warning about the potential for a downside move as BTC traded sideways.
BTC/USD 4-hour chart. Source: Twitter
“Bitcoin isn't moving while Ethereum and Altcoins move, which makes sense while people try and make the most of the upcoming merge,” Crypto Tony said. “But these moves usually end in a dump, when this happens. So be cautious.”
Following the price dump, Crypto Tony provided an update on what price may be a good entry point, tweeting, “$18,600 is my target on this leg down, as this level is also the swing low.”
Altcoins in the red
Altcoins suffered a similar fate as BTC as a result of the afternoon downturn, with the vast majority of tokens trading in the red for the day in what many are warning is a bear trap.
Daily cryptocurrency market performance. Source: Coin360
According to data from CoinMarketCap, the only notable gain out of the top 200 coins came from the embattled cryptocurrency brokerage platform Voyager, whose VGX token has gained 43.15% over the past 24 hours and currently trades at $0.773.
Other positive performers include a 7% gain for DAO Maker (DAO) and a 4.25% increase in the price of Ethereum Classic (ETC).
The overall cryptocurrency market cap now stands at $951 billion, and Bitcoin’s dominance rate is 38%.