Bitcoin Market Update: BTC/USD is bound to retest $9,000 and here's why

The stormy weekend in the DeFi industry took a toll on the major coins, including Bitcoin. The leading cryptocurrency held traders in suspense and kept trying to push below $10,000 Saturday, September 5. However, a cluster of buying orders located below the physiologically important support proved to be strong enough to ward off the bears' attack. 

BTC/USD has started the week in a tight channel limited by $10,000 on the downside and $10,300 on the upside. At the time of writing, BTC/USD is changing hands at $10,100, mostly unchanged on a day-to-day basis and since the beginning of Monday. The coin's price has barely changed in the last 24 hours, while its market dominance edged higher to 57.8%.

Bitcoin is resilient to DeFi woes

The DeFi industry had its roller-coaster time on the weekend due to the panic caused by the controversial SushiSwap project. As the FXStreet reported, the creator and the project administrator spooked the market by dumping their tokens from the dev fund. Investors accused them of a scam and rushed to exit. $SUSHI crashed from over $9 to $1.1 in a matter of days. 

The SUSHI collapse led to the broader sell-off of DeFi-related tokens and affected Ethereum (ETH) price as all major DeFi projects are based on the Ethereum blockchain. When users started taking their money off the table, ETH spiraled down and bottomed at $311. 

However, BTC/USD has been relatively stable, moving in a tight range with strong support at $10,000. Moreover, the Bitcoin's Fear and Greed Index moved from extreme greed to a neutral condition. The index settled at 40-41 during the weekend, which means BTC/USD may be in for range-bound trading around the current levels. 

What to expect next

The daily chart implies that BTC/USD is still vulnerable to the further decline towards the support of $9,000 reinforced by the daily SMA200. A sustainable move below $10,000-$9,800 will open up the way for a deeper plunge and confirm the bearish scenario for the days ahead. 

On the other hand, $10,500 (the upper line of the recent consolidation channel) creates the initial resistance that needs to be taken out to improve the immediate technical picture. Once this happens, A more substantial barrier of $11,000 will come into focus. The daily SMA50 and the broken upside trend line add credibility to this resistance and makes it a hard nut to crack for the bulls. Also, a cluster of 719k Bitcoin addresses with a break-even point on the approach creates an additional restrain.

BTC/USD daily chart

From the fundamental point of view, the sell-off on the stock markets may put additional pressure on risky assets and, consequently, on Bitcoin and other digital assets. The US markets are closed due to the Labor Day, while CME has an early closing. The global stocks stabilized after the biggest two-day sell-off since June caused by geopolitical jitters and the uncertainty about the state of the global economy. However, according to Ben Emons, the markets are still fragile, managing director for global macro strategy at Medley Global Advisors:

"Risk assets remain fragile following Thursday's tech-led rout and volatility spike. With stimulus having been key for supporting equities and such lofty valuations, its renewal will be crucial not only for the recovery but as a driver for equities as job risks mount." (cited by Bloomberg)

The growing dollar is another risk factor for Bitcoin as the devaluing American currency has been one of the strong catalysts for BTC price increase in recent months. The USD is back on bulls' radars amid the correction on the overbought risk assets. Investors chose to cash out on their stock market positions, which drives the greenback demand and increases pressure on such anti-inflationary assets as Bitcoin and gold.

To conclude: BTC/USD is vulnerable to the further sell-off towards $9,000 amid a combination of the fundamental and technical factors. A sustainable move below $9,800 will confirm the bearish scenario. On the other hand, a recovery above $10,500 will reduce the immediate pressure on the price and allow for an extended recovery towards the critical barrier of $11,000.