Bloomberg News reports that if a couple of technical charts must be taken seriously, Bitcoin is slated for another downward movement. The digital currency’s largest market value is down by 50% and more in the current year. And recently, the token has been staying in a range between $19,000 and $25,000. In recent months, the token has been struggling as rates are being raised by the Federal Reserve, and inflation appeared to be stubborn, although it did show a little change at $21,480 in New York as of 9:03 am.
The nearby round number level of $20,000 is observed to be a little “sticky” over the last couple of months, as per technical strategist of 22V, John Roque stated in a note on Sunday, although he is anticipating that it might slide to $10,000.
According to a senior market analyst associated with Oanda, Edward Moya, Bitcoin might be able to defend a figure of $20,000; however, that is a level that might appear tough to be held if the dollar continues to show appreciation leading to the speech of Fed Chair Jerome Powell at Jackson Hole Symposium.
Downturn
Many other technical analysts are expecting figures that might be lower after Bitcoin has shown a tendency to run higher only to retreat later.
Bloomberg News reports that the sell-off is essentially related to a loss in momentum for a short-term, enhanced risk within the long-term downtrend, as revealed by Katie Stockton, the co-founder of Fairlead Strategies, mentioned in a note on Monday.
Seasonality
The month of September has been the worst for Bitcoin. For five consecutive years, Bitcoin has slid by an average of 10% in September.
Option Demand
Traders are shelling out a lot more for offering protection lower than $18,000. The Implied Volatility Skew indicates that the traders are ready to spend elevated premiums.
Option Quantity
The options chain for the contracts that will expire towards the end of September implies that the strike price is $20,000 and the maximum open interest, which leads to a sustained break below. Also, put sellers might be forced to hedge their positions, putting pressure on prices and bringing them back into focus on the June lows.
Underperformance
Bitcoin has managed to recover from the lows of mid-June, but Ether which is number two, has performed even better amidst the enthusiasm related to the Merge upgrade.
