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Bitcoin price just dropped below $9,900. As the market retraces, the $10,000 support level has been described as a key psychological support level. According to a recognized crypto trader, if BTC remains below this level, it could signal a larger drop.

BTC/USD via TradingView

Crypto traders like DonAlt say that a breakdown in key lower horizontal support levels, including $9,600, could fuel a larger correction in the sub-$9,000 region, and possibly even a drop to $7,500. The trader said earlier this month:

“Once we see a close above red or below green, then the small timeframes get interesting. A close below $9,000 would target $7,500. A close above $12,000 would target above $14,000.”

After retesting $10,000, the trader stressed that support has been weakening, leaving BTC vulnerable to a potential pullback.

“Heat. The above is still there, but this is starting to get people’s attention. There is a limit to how many times support can hold, and BTC is rapidly approaching it. The chart is preparing for the Bakkt launch (September 23),” he added.

Despite BTC sell-off, trading volume continues to decline, Bitcoin price cannot defend

According to data provided by Messari, Bitcoin’s actual trading volume hovers at $450 million, which has fallen by more than $1 billion since BTC showed strong momentum against the US dollar in July and August.

BTC’s trading volume tends to decline on weekends, which equates to an average price drop of about 3-4%. However, Bitcoin’s trading volume has also sometimes surged to $700 or $800 million.

But in the past 48 hours, Bitcoin’s daily trading volume has been weak, increasing selling pressure. This creates a difficult environment for bulls to drive a rebound in Bitcoin price.

Josh
Rager, another recognized cryptocurrency trader, pointed out that Bitcoin price is eyeing $9,600 to $9,700 due to lower level support. However, if buyers step in to defend the $9,000 area, the price may rebound.

“On the daily chart, based on price levels, it looks like Bitcoin could fall back to $9,600 to $9,700, breaking support, while the high volume node area also acts as support. Keep an eye here as buyers may step in in the short term.”

Technical analysts generally expect the next major support level to be at $9,600. Depending on how Bitcoin price reacts to this price level, traders expect a further drop to $7,500 or a retest of $10,900 resistance.

Bakkt is a major variable

On September 23, Bakkt’s much-anticipated physically-settled Bitcoin futures market will launch. If successful, these will be the first physically-settled BTC futures to hit the market.

Throughout 2019, and particularly in February and March, regulated futures markets like CME accounted for a relatively large portion of BTC trading volume.

In March, the futures market accounted for more than 30% of global Bitcoin trading volume, affecting the price of BTC (Source: Bitwise)

A Bitwise report for the first quarter of 2019 showed that when fake volume is removed from the market, CME and CBOE account for 35% of all spot volume.

“And when you remove fake volume, CME and CBOE futures volume is very significant ($91 million), especially compared to real spot volume (35% in February 2019). This is good news because it means that CME (a regulated, regulated market) has a large scale, which is important for ETFs.

If the launch of Bakkt can meet a large demand from the investor market that previously did not participate in this market due to the lack of infrastructure and viable products, it could be a catalyst for BTC's recovery.