Bitcoin shed 1.74% on Wednesday, September 8. Heightened volatility was seen in the BTCUSD pair during the first half of the day. In the North American session, the pair traded in the range of $45,500-$47,000.
Based on historical data, after collapses of 15% or more, price action remains locked in a sideways trend for about three days. Two days have gone by and the trading range is narrowing. Today, market participants will either pump it up and continue to flatline, or there will be as much as a 5% upward/downward move. Buying activity remains low-key as losses on long positions totaled $1.21 bln.
There is one potential upside factor – a downward correction in the DXY index. All major currencies are trading in positive territory, including equity benchmarks. Oil and gold are also trending higher as interest in risk assets is on the rise across the board. If after 15:30 (GMT+3, speech by ECB President Christine Lagarde) negative dollar dynamics persist, buyers will have a time window with a tailwind for price action to recover to $47,500/$48,000.
Conversely, under a bearish scenario, the road to $43,500 will be open for sellers without the need for large volumes. All they would need to do is launch a number of large deals on the market, worth approximately $25 mln (5 deals equal to $5 mln each in the aggregate), after which a cascade execution of protective stops below $45k could be triggered again.