Fear has gripped investors and traders alike in light of the recent adverse market action. Bitcoin, the most well-known cryptocurrency, has suffered the highest levels of selling pressure since the crisis in June and July.
With a high of $22,400 on September 13 and a low of $18,790 today, Bitcoin has fallen by nearly 8%. The price has dropped by a stunning 13.31 percent.
This, too, can be explained by the unfavorable economic developments in the United States, as have the recent price fluctuations. As of this writing, the latest sell-off has not lost any of its steam.
Price information from the last few days places Bitcoin between $19,344 and $18,346. Financial market participants should not place any stock in these figures.
Bitcoin Needs To Crawl Back Up
Bitcoin’s attempt at a comeback resulted in the formation of a double triangle, which is harmonically related to the XABCD pattern.
This pattern may point to a reversal in which buyers can get in at a discount and sellers can make a profit. However, this was not the situation.
Bitcoin may retest the $20,000 crucial territory before if retreats to the $18,000 level.
BTC is selling at a significant discount to the 78.60 Fib level right now. Being so far away from the important psychological threshold of $20,000, this price point may hinder any further rebound.
Investor confidence can only continue to rise with the aforementioned price in place.
A turnaround can only occur if bulls step in to buy the ongoing decline and turn around the bearish trend.
Bitcoin’s price may be able to retest the $20,500 resistance level if the aforementioned hypothetical event occurs. The 61.80 Fib level is where the aforementioned resistance is located.
However, Bitcoin’s correlation with the broader financial landscape is not advantageous. Bitcoin’s close correlation with the S&P 500 and NASDAQ indexes makes it difficult to restore upward momentum.
BTC Needs All Energy It Can Muster To Normalize
Bitcoin’s rebound is in peril as the larger financial sector experiences a steep decline. In fact, it may not even hit the $20,500 resistance mentioned.
According to the renowned cryptoanalyst @woonomics, Bitcoin has not yet reached rock bottom. As he evaluated the past and present performance of Bitcoin, he discovered that only 52 percent of all coins are underwater.
Bitcoin’s previous bottoms were 61 percent, 67 percent, and 57 percent. The data he gave indicates that if Bitcoin were to reach rock bottom once more, it would not be at $18,000.
For Bitcoin to emerge from this predicament, the larger financial sector must rebound from the current collapse in order to restore investor and trader confidence.
As of this writing, the Stoch RSI values are converging, which may provide a modest boost to the price.
However, with present market dynamics following a strong downward trend, recovery is unlikely.
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BTC total market cap at $359 billion on the daily chart | Source: TradingView.com