Bitcoin Price Analysis: BTC/USD erases Coronavirus-driven gains as price nosedives to $8,500

Bitcoin price has been on a downward momentum since Monday this week. All the attempts to pull up from the dive have been squashed where the path of least resistance remains to the downside. The latest blow was the slide beneath the key $9,000 level where BTC/USD bearish leg extended to $8,500.

At the time of writing, Bitcoin is trading marginally below $8,700 a shallow recovery from the dip. A 1.16% loss has been posted on the day (during the Asian session). The trend at the momentum is bearish while the volatility remains high.

Other major cryptocurrencies such as Ethereum and Ripple are also in the negative having touched lows of $210.57 and $0.2245 respectively. Bitcoin Cash has not been spared from the bearish wave as it has sunk to $307 while Litecoin price dived under $60 to form a low at $57.33.

The SEC squashes BTC ETF hopes with another proposal rejection

The United States Securities and Exchange Commission on Wednesday rejected a Bitcoin exchange-fund (ETF) proposal filed by Wilshire Phoenix. The regulator cited failure by Wilshire Phoenix to prove that the Bitcoin market is immune or sufficiently resistant to market manipulation. The proposal was filed last summer with NYSE Arca. The filing said in part:

The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be 'designed to prevent fraudulent and manipulative acts and practices' and 'to protect investors and the public interest.

Bitcoin price technical analysis

Bitcoin price initial freefall from $10,500 was been attributed to technical reasons such as the digital asset being overbought due to the week-after-week rally since January. Moreover, the rally driven by the Coronavirus took a breather as the virus control took shape in China, although fears due to increased infections in other parts of the world continue to mount.

The most recent fall from levels above $9,000 to $8,500 is mostly attributed to the SEC’s rejection of another Bitcoin ETF as reported above. The news is likely to have angered the investors who have been hoping for such a product in 2020 after many proposals were rejected in 2019.

From a technical perspective, Bitcoin is likely to stay in the lower levels a while longer. The RSI is in the oversold region and still maintains a downward slope, which means selling activities are high, ignoring the oversold condition. The last resort for the bulls is the support offered by the 50% Fib retracement level taken between the last swing high of $10,500 to a swing low of $6,432 around $8,500, however, $8,000 is the primary support.

BTC/USD 240' chart