As the broader cryptocurrency markets retreat, the most popular Bitcoin stuck around $20000 on Sunday.
Concerns over the rate hike path adopted by the Federal Reserve saw the MIVIS CryptoCompare Digital Assets 100 index falling 1% in its continuous decline of four days.
Bitcoin remained unchanged in New York at 7.45 am. This was after a two-day fall of 7.6%, with cryptocurrencies moving in tandem with stocks on Friday after Federal Reserve Chairman Jeremy Powell’s Jackson Hole conference speech.
Consulting firm Venn Link Partners Chief Executive Officer Cici Lu said risky assets are seeing money flowing out after Powell’s remarks. Bitcoin is behaving as a high beta asset after markets did not like what Powell said.
Bitcoin, which hit lows during recent months, saw $20,000 as a support level. The currency has risen higher in recent weeks crossing $25,000 in August, and it has not fallen below the $20,000 level since July 14.
The fluctuations have happened due to uncertainty about the monetary path caused by the rate hikes and their effect on risky assets.
Several strategists have marked $20,000 as a key level for Bitcoin though lower levels are not ruled out.
Katie Stockton of Fairlead strategies sees long-term support levels between $18,300 and $19 500 for the long term. Mark Newton of Fund Strat strategies has identified some key points in the $19,000 range with an important area around $17,500. Newton said the area is around the June lows and could allow a 100% alternate wave projected from the recent decline in August.
Risky Assets
The last two Fridays were tough for the Cryptocurrency market. According to Coinglass data, $288 million worth of cryptos’ long position was unwinded in the recent decline. Cryptos worth $562 million was liquidated on August 19, the highest since June 13. The second biggest digital asset, Ether, remained steady on Sunday at around $1,500 after declining over 13% in the previous two days. Ether price has fluctuated recently before the most significant Merge upgrade in Ethereum in mid-September.
According to a note on Friday by analysts at Bitfinex, the drop in Ethereum before the impending Merge is due to the bearish sentiment prevailing over the risk assets. There are no signs of abatement in digital assets, whose volatility has now become characteristic.
