Bitcoin appeared to be stuck around $20,000 on Sunday as part of a broader crypto market recession amid concerns over the US Federal Reserve’s rate hike path.
The largest token has changed little as of 7:45 am in New York. This is after he fell 7.6% in two days and on Friday he moved in step with US stocks after Fed Chairman Jerome Powell spoke at the Jackson Hole conference. The broader cryptocurrency market retreated on Sunday, with the MVIS CryptoCompare Digital Assets 100 Index down 1% in its fourth straight day of decline.
“Cryptocurrencies have followed a sharp correction in the U.S. stock market,” said Sisi Lu, CEO of consulting firm Ben Link Partners. Bitcoin is reopening as a high beta asset. ”
The $20,000 levels acted as support as Bitcoin hit lows in recent months, while the cryptocurrency was on the rise in recent weeks. Until Saturday, he had never been below $20,000 since July 14, and in August he was above $25,000.
The volatility has come amid uncertainty about the path and magnitude of the Fed’s rate hikes and their likely impact on riskier assets.
While many strategists have flagged $20,000 as a key point for Bitcoin, the level of support may also be low.
Fairlead Strategies’ Katie Stockton sees long-term support in the $18,300 to $19,500 range. Fundstrat strategist Marc Newton flagged several key areas in the $19,000 range, pointing to a “key area” around $17,500 near June lows, the latest from mid-August. , allowing for 100% alternative wave forecasting of the decline in , he said in a note on Friday.
The past two Fridays have been tough for crypto markets, with $288 million in crypto longs liquidating on the most recent Friday, according to Coinglass data. On August 19th, $562 million of longs were liquidated, the largest since June 13th.
The second-largest crypto ether held around $1,500 on Sunday after dropping 13% over the previous two days. The last few weeks have been volatile ahead of the long-awaited Merge upgrade scheduled for mid-September.
A Bitfinex analyst said in a note on Friday, “Ethereum’s decline ahead of an impending merger is also notable.
“The volatility that has characterized the digital token space shows no signs of abating.”