Bitcoin extended its drop below $20,000 on Monday as part of a wider cryptocurrency-market retreat, amid concern about the Federal Reserve’s rate-hike path.
On Monday, the largest token dropped as much as 2.3% to $19 527. This is the fifth consecutive day of declines. It comes after Friday’s speech by Fed Chair Jerome Powell at the Jackson Hole conference. Monday saw the wider crypto market retreat, with the MVIS CryptoCompare Digital Assets 100 Index falling as high as 2.5%.
“Money is flowing from risky assets. Cici Lu, chief executive of Venn Link Partners, stated that Crypto followed the sharp adjustment in the U.S stock market after Powell’s comments. “Markets didn’t like his comments and Bitcoin is resuming its role as a high beta asset.”
Bitcoin had been climbing higher since the lows of recent months. However, the $20,000 level was a support level. It had not been below $20,000 since July 14th and even surpassed $25,000 in August.
Uncertainty about Fed rate hikes’ path and impact on riskier assets has led to gyrations.
Many strategists have identified $20,000 as the key point for Bitcoin. However, levels of support could be lower.
Katie Stockton, Fairlead Strategies’ long-term supporter, sees $18,300 to $19,000.500. Mark Newton, the Fundstrat strategist, has identified key areas within the $19,000 range. He said that a “real area” of importance was around $17500. This would allow for a 100% alternative wave projection of the latest decline from mid-August.
Antoni Trenchev (co-founder and managing partner at Nexo), wrote Sunday that $18,900 is available if Bitcoin does not hold $20,000 before a date with the June intraday high of $17,600.” It doesn’t look very pretty if it is below that level.
According to Coinglass data, $288 million worth of crypto longs were liquidated on Friday. The largest liquidation of longs since June 13 was $562 million, which occurred on Aug. 19.
The second-largest crypto Ether fell as much as 4.1% to $1,422.67 on Monday, continuing its decline from $2,000 just a few weeks ago. It has been fluctuating ahead of its highly-anticipated Merge upgrade which is due in mid-September.
Analysts at Bitfinex stated in a Friday note that Ethereum’s decline ahead of the impending Merge was also noteworthy. The bearish sentiment seems to be taking place across all so-called risk asset classes. “The digital token space is characterized by volatility and it shows no signs of slowing down.
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