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- Bitcoin has seen an 11% decline over the past month.
- The downturn in Bitcoin is attributed to increasing selling pressure.
The cryptocurrency market is currently engaged in a significant battle against prevailing bearish forces, with a slight improvement as the market capitalization rises by 1.82%, reaching $1.07 trillion. Major cryptocurrencies Bitcoin and Ethereum have made progress, increasing by 1.70% and 2.59% respectively in the last 24 hours. However, these gains have not yet dispelled the prevailing bearish sentiment. Of particular concern is Bitcoin’s trajectory, which has been consistently declining since the second week of August, experiencing a 7.68% drop in just the past week.
Despite the oldest cryptocurrency reaching a high of $31,000 at the start of Q3, it has since encountered a notable downturn. The 11.35% decline over the last month has raised concerns among investors. After nearly 11 weeks, Bitcoin has been trading within a low price range of $25,000 to $26,500, with attempts to break free from this level.
Compounding the uncertainty, the community is eagerly awaiting comments from Fed Chair Jerome Powell on August 25th regarding the global economic outlook and possible interest rate changes. Concerns about ongoing inflation, as discussed in the July Fed meeting, have led to speculation about a rate hike in September. Powell’s data-driven approach highlights Bitcoin’s cautious position, as investors seek clarity on the Fed’s monetary policy trajectory.
What are Bitcoin Investors Up to?
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Almost all short-term Bitcoin holders are facing a difficult situation. Following a recent sell-off, a substantial 88.3% of Bitcoin held by individuals who retain coins for less than 155 days are now dealing with unrealized losses, according to Glassnode. In simpler terms, around 2.26 million out of 2.56 million Bitcoin (valued at $66.5 billion) held by these short-term investors were purchased at prices exceeding the current market value. This week’s loss dominance reading is the highest since the March sell-off to $19,800, indicating increased price sensitivity and significant underwater holdings, reminiscent of previous “top-heavy markets.”
Will the Bulls Manage to Regain Control?
An examination of Ethereum’s recent price trends illustrates a struggle between bulls and bears. The short-term 9-day exponential moving average (EMA) is positioned at $26,780, reflecting prevailing bearish control. The Relative Strength Index (RSI) is at 28, suggesting oversold conditions.
BTC Price Chart, Source: TradingView
At present, Bitcoin is valued at $26,481, showing a slight increase along with an 8.20% rise in trading volume. For the bulls to regain strength, they must overcome resistance levels at $26,833 and the 20-day exponential moving average (EMA) at $27,777. Successfully clearing these barriers would suggest the potential for Bitcoin to remain within the $24,800 to $31,000 range.
Conversely, the bears’ grip could strengthen if they manage to keep the price below $24,800, potentially leading to a drop to $20,000. In this intense contest between market forces, the outcome remains uncertain.
Will BTC Break its Bearish Momentum? Share your thoughts by tweeting us at @The_NewsCrypto
