Bitcoin retreated to a critical support area in the late June region of 18,000 that served as the upper limit of the downside move.
Bitcoin Breaks Critical Level.
After breaking below the bearish flag in mid-August, prices were able to fall further with a break of 20,000 before reaching a critical support area around 19,600. Although it has returned to action, this level has served as a source of resistance for major cryptocurrencies since 2017.
BTC/USD falls below $20k. Source: TradingView
This will put strong downward pressure on Bitcoin when it moves into September. In addition, according to cryptocurrency expert Ali MartinezFor the first time since 2018, Bitcoin’s market share has fallen below 39 percent.
For Bitcoin aficionados, this is troubling news as alternative cryptocurrencies continue to topple the cryptocurrency king.
Prominent cryptocurrency analysts have drawn attention to a worrying trend in Bitcoin’s performance prior to September.
For example, according to one expert, Bitcoin has experienced a month-end loss in nine of the past twelve Septembers. On September 7, Glassnode reported 19.29 million BTC addresses had a loss.
On December 17, 2017, BTC/USD hit an all-time high of $19,666. Since then, a breach of this zone in December 2020 has helped propel the major cryptocurrency higher before reaching a new record high of $69,000 in November last year.
Selling pressure has returned from the lows of $18,595 below the end of June, where a fall below previous support has turned into resistance.
Price may deteriorate further.
As the rate declines, a breakout of the $18,000 psychological level could result in a retest of the $17,792 level, representing a 78.6% retracement from 2020 to 2021, with the December 2020 low of $17,569 serving as the next. Level of support.
The four-hour chart shows how these historical levels have created support zones that prevent both bulls and bears from closing as short-term price action swings between $18,500 and $19,000. Retests of $19,666 and the next level of support at $20,418 will likely push prices above $19,000 and $19,500 respectively.
In the near future report, Glassnode mentioned the negative market movement that could come from Bitcoin. He said that about 12.589 million BTC or more than 65.77% of the BTC circulation has been dormant for at least a year.
In the past, “Bitcoin bear markets” were characterized by widespread inactive supply. This adds to the pain experienced by senior professionals who have been patiently waiting for inflation.
Short-term volatility was predicted by CryptoQuant-based author BaroVirtual. The analyst studied the trending pattern of Net Unrealized Profits (NUP) which shows short-term fluctuations.
Featured image from Shutterstock, charts from Glassnode and TradingView.com