Bitcoin traders are faced with a familiar story of losing stocks and an increasing greenback this week, as $20,000 fails as support. After the Jackson Hole rout in the United States, Bitcoin ( BTC), heads downhill on a bumpy road into September.
The U.S. Federal Reserve reiterated its hawkish views on the inflation outlook and risk assets were sold across the board. Crypto is still reeling from these events.
The mood was not helped by a nonvolatile weekend. BTC price action is now focusing on areas below $25,000. Multiple weeks of upside have been effectively lost. Analysts and traders expect a retest the June macro lows.
While the Fed is currently at a halt until September’s rate hike decision, there are still many reasons to be upset, including geopolitical uncertainty, inflation, and the latter increasing in Europe.
As last week, Bitcoin is fundamentally resilient as an internet, with on-chain data telling an entirely different story than price charts.
Cointelegraph examines five factors that you should consider when assessing where Bitcoin/USD might go in the next days. Data from Cointelegraph Markets Pro, TradingView show no surprises when it comes to guessing the BTC/USD closing at the week’s end.
After a relatively uneventful weekend trading period the pair sold off significantly at the end Aug. 28, which resulted in the lowest weekly close since July.
Bulls suffered a terrible August after a $3,000 loss the week before. Analysts were less optimistic than usual with only days before the monthly candle closes.
“Hoping for a recovery but the way equities closed Friday does not look so hot,” Josh Rager, trader, stated to his Twitter followers as part of a weekend update.
Il Capo of Crypto, a popular trading account, saw the potential for a short squeeze to the upside before the downtrend continued. He noted that negative funding rates could indicate a bias towards straight losses in derivatives markets, and predicted that $23,000 would reappear first.
“More people expect 19k than they do 23k. The fund speaks for itself. There’s also a lot more liquidity than 21k. “Squeeze those shorts,” he tweeted. Responding, Mark Cullen , a trader, noted the fact that traders were “adding more BTC Shorts in an area between 20.1k and 20.3k.”
“There is an inefficiency above that and another around 20.9-21.1k. He said that if it can be broken up, it’s likely it will move quickly higher.”
Gert van Lagen, technical analyst, gave a $17.500 floor target in the daily chart amid numerous calls for $17,000 and lower.