Bitcoin has once again failed to preserve the support levels from recent weeks. Prices have dipped almost 9% in recent days, falling down from $21,000. It’s a bearish market once again for the millionth time this year in the wake of the impending financial recession. Key rate hikes are supposed to be announced by the Fed in the next week, creating risk-asset markets. Bitcoin proved very sensitive to these matters, once again dropping the $21,000 level.
Currently trading for just over $20,000, there are rumors that it could once again slip below that level. US equities face similar woes. S&P 500 is also down, while the Nasdaq composite index is 4% lower than the weekend. Until the Fed stops its rate hikes, the price will continue dropping.
Red-Hot CPI Also a Problem
In late August, the CPI turned up 8.3% instead of 8.1% as expected. The Consumer Price Index’s annual increase was much higher than expected as global financial markets took a trip south. Market participants have realized that the Fed must increase the rates in order to keep inflation at bay, which is already rampant as is.
On Tuesday, Bitcoin traders were pretty bullish, resulting in a resistance that nearly had a spike at $23,000. It was short-lived, though, as it sparked a 7.5% sell-off in price that resulted in a new Bitcoin price low of just over $21K. The early Tuesday rally was noticed by some experts who highlighted that the world’s top cryptocurrency is on a run. Bulls have managed to negate a price downtrend on the daily chart, although recent gains suggest that a near-term market bottom in in place. Prices can still continue working sideways to go higher in the near term, giving traders and holders some hope.
However, if sell-offs like Tuesday continue again, the price declines will go deeper. It’s been almost a year since Bitcoin peaked in November 2021, and there’s no sign it’ll go that high ever again. At least it seems impossible, although no one can know with Bitcoin’s volatility.
Bear Market Close to Its End?
The fact that it’s been nearly a year since Bitcoin peaked may spell the end of its bear run. Historically, bear trends find their absolute bottom after 365 days. There’s still just a couple of months for that cycle to reach its end, which might mark off a new bull run. At least we all hope so.
But, things may go even worse before they get better. Independent market analyst Il Capo of Crypto says that Bitcoin could drop further down to the $14K-$16K range before it goes bullish. He also suggested that it may rise to $23K, but that wouldn’t be the bullish point.
On a global scale, the cryptocurrency market is still dominated by Bitcoin (40%). It stands at over $1,023 trillion, with hopes of it going higher. It’s all a bit too much to bear at the moment, but things might look better by the end of the year.