Bitcoin Continues to Slide as Analysts Predict More Declines
Bitcoin and other cryptocurrencies are sliding, with analysts predicting more declines. Macroeconomic factors and pending ETF decisions impact the market's volatility. Prices may drop further due to technical weaknesses.
Troy D. Hanson
September 05, 2023
Bitcoin and other cryptocurrencies experienced a downward trend on Tuesday, remaining at relatively low levels. Analysts are pointing to technical weaknesses as an indicator of further potential declines.
Over the past 24 hours, the price of Bitcoin dropped by 1% to $25,750, moving even further away from the stability it found around the $26,000 mark in recent weeks. While there have been temporary gains, such as a spike to $28,000 last week following a court ruling in favor of cryptocurrencies, prices have struggled to maintain higher levels.
"For more than two weeks, Bitcoin has remained at $26,000. Any attempts to surpass the 200-day average have been met with stronger selling pressure, confirming that market control is still in the hands of the bears," stated Alex Kuptsikevich, an analyst at broker FxPro. "This situation indicates higher risks of the consolidation ending with a downward momentum, potentially reaching $25,000 or even $24,000."
Macroeconomic Factors at Play
It is important to note that macroeconomic catalysts continue to impact the cryptocurrency market. Similar to how the Dow Jones Industrial Average and S&P 500 in the stock market are affected by interest rates, cryptocurrencies also remain sensitive to changes in interest rates, as they influence the demand for riskier assets.
The future of Bitcoin and other digital assets will likely be shaped by these external factors, contributing to the ongoing volatility in the market. As investors navigate through uncertain times, it is crucial to closely monitor indicators and trends that may help anticipate potential price movements.
Decisions on Bitcoin ETFs Awaited by Digital-Asset Traders
Digital-asset traders are eagerly anticipating the forthcoming decisions from the Securities and Exchange Commission (SEC) regarding applications for spot Bitcoin exchange-traded funds (ETFs). These ETFs, which hold Bitcoin, have been recognized as a significant driver for the cryptocurrency market. Although the SEC has recently delayed its verdict on multiple applications until October, crypto enthusiasts remain optimistic that approval is imminent. Experts have engaged in discussions about the extent to which the decision has already been incorporated into market expectations.
When the SEC finally announces its decision, there are two potential scenarios that could unfold. The first scenario suggests a price decline for Bitcoin as it approaches the support level of $24,995 and extends losses to the critical support level of $24,000. Rania Gule, an analyst at broker XS.com, emphasizes this possibility. Conversely, in the worst-case scenario, Bitcoin's price might plummet to the demand zone between $21,711 and $20,155. These projections find support in the signals provided by the Relative Strength Index (RSI), which currently indicates a bearish momentum as it decreases.
Among other cryptocurrencies, Ether, the second-largest digital asset, experienced a minor drop of less than 1% to reach $1,630. However, smaller tokens known as altcoins displayed more positive performance. Cardano maintained its position above flat, while Polygon demonstrated growth of 3%. The performance of memecoins was more varied, with Dogecoin reporting a gain of 1% and Shiba Inu losing 2%.