Bitcoin (BTC) was rejected at the significant $12,000 resistance level for the third time today, instigating a quick collapse that saw it lose almost 8% in value throughout the day. The fall has erased any gains Bitcoin made over the last week, although it is still trading up 20% since this time last month.

Bitcoin Cash (BCH), Bitcoin SV (BSV), and Litecoin (LTC) all suffered even heavier losses of over 8%, while major altcoins like Ethereum (ETH) and Chainlink (LINK) managed to survive the crash with only minor losses.

The fall was not entirely unexpected as Bitcoin’s failure to break $12,000 created a ‘double top’, a pattern that commonly precedes a return to previous support levels. This enacted a sell-off that saw $10 billion worth of Bitcoin exit the market in the past 24 hours, and a fall to nearly $11,200 on some exchanges.

Gold/Silver Correlation

The fall follows similar drops by both Gold and Silver, two assets most commonly associated with Bitcoin as stores of value. However, traditional markets like the S&P 500 have enjoyed a good day following US President Donald Trump signing an executive to provide further pandemic relief funds.

It’s possible that the further economic stimulus package has taken the focus off gold, silver, and Bitcoin as hedges against economic collapse. With renewed potential in traditional stocks, investors may be moving money back into companies previously deemed at risk.

Earlier today, popular analyst and Twitter user ‘Willy Woo’ (@woonomic) noted the similarities between current movements and the fourth quarter of 2016 when Bitcoin began its last big rally, calling this the “early main bull phase“. He also noted the differences between the cryptocurrency market now and then, particularly the large increase in institutional investment.

“I think this cycle BTC gets to prove itself as a legit macro asset bucket for traditional investors,” he tweeted.

Analysis

Currently, $11,400 is acting as shakey support but with global stock markets bracing for a big drop, we could see Bitcoin fall further in the following days. Below that, the 100-EMA should provide stronger support at the $11,200 level, with the previous $10,900 support still in action below that.

With a CME gap still standing open at around $9,600, there is definitely potential for further downside movement as investors push to fill this gap. Despite this, Bitcoin maintains some upward momentum over the week and sentiment is still trending towards the bullish.

Gemini Exchange co-founder and CEO Tyler Winklevoss recently tweeted his support for Bitcoin, saying that the digital asset is currently at “the bottom of the first inning”. The tweet is in response to people asking him if it’s too late to buy Bitcoin.