Investing.com - Bitcoin fell on Wednesday, on the back of concerns that the cryptocurrency may be set for a period of selling pressure as it entered technical levels that could offer strong resistance to upside momentum.
BTC/USD traded at $2,528.9, down $213.1, or about 7.77% by 13:29 EDT.
Goldman Sachs chief technician Sheba Jafari recently warned clients that the bitcoin market may be heading for bearish territory, adding that they should consider the possibility of reinitiating positions after a pull back to between $2,440 and $1,915.
"It's on track to forming a bearish key day reversal if today's (June 12) close settles below 2,749. It will also form a key week version if Friday's close is below 2,475. Both daily/weekly oscillators are diverging negatively. All of this to say that the balance of signals is looking broadly heavy."
The move lower in bitcoin comes a few days after the digital currency hit a record high of $3,000 on Monday.
Sharp rallies and steep troughs are not uncommon moves for bitcoin, according to Raoul Pal — author and publisher of The Global Macro Investor, an elite macroeconomic and investment research service – who said “[Bitcoin] goes through this periodically… it rises several hundred percent, and then collapses.”
The sharp move lower in bitcoin was mirrored by a similar move in Ethereum, which dipped by 7.5% to $355.79.
Investors, however, remained optimistic that Ethereum would be the alternative cryptocurrency that usurps bitcoin as the largest and best capitalized blockchain – a phenomenon referred to as “the flippening”.
At current prices, Ethereum’s market cap of nearly $34 billion is not far behind bitcoin’s roughly $42 billion.