Attempts by Bitcoin (BTC) to rise above the crucial psychological level of $ 20,000 have faltered as the bears seem too strong in the wake of the prevailing macroeconomic factors. As a result, technical analysis points to a bleaker future for the flagship cryptocurrency.
Notably, a summary of Bitcoin’s one-day technical analysis as of Sept. 4 indicates a strong sell at 16 while neutral levels stand at nine. At the same time, none of the analyzes recommend buying the asset right now.
A breakdown of technical analysis shows that oscillators suggest a two sell while nine express neutrality. Based on the moving average, the technical data points to a strong sell at 14, while only one shows neutrality. Overall, the analysis can be considered that Bitcoin is in an oversold state as the market looks for the possibility of a rally.
This is when Bitcoin continues to trade below its 200-week moving average, a metric that has historically provided insight into what stage of the cryptocurrency market cycle it is in. The asset has been trading in the zone for nearly two months.
Bitcoin extends losses below $ 20,000
It is worth noting that Bitcoin briefly rose above $ 20,000 on Sept. 2 following a strong US employment report. The asset momentarily prompted the general market to claim the $ 1 trillion capitalization. However, Bitcoin has since corrected trading to $ 19,800 at press time, with losses of nearly 2% in the past 24 hours.
Overall, Bitcoin has been trading around the $ 20,000 level for several weeks after making short-term gains that saw the price above $ 25,000. The price movement inspired a section of analysts to suggest that Bitcoin may have found its low.
For example, with Bitcoin’s monthly relative strength index (RSI) hitting 42.2, cryptocurrency analyst Plan B hinted that it could signal that the asset is poised for another rally based on historical trading trends.
“Bitcoin RSI 42.2. If history is any guide, the RSI could be 90+ in 1-3 years, unless you think history says nothing about the future and this time it’s different. The choice is yours ”, he said in a tweet on September 2.
The next Bitcoin course
Notably, the current price movement of Bitcoin is in line with analysts’ projections that a solid job report for August will drive a major correction in the cryptocurrency market.
This follows Bitcoin’s high correlation with the stock market in the context of the prevailing high inflation. Therefore, the stronger-than-expected jobs report would likely prompt the Federal Reserve to implement more aggressive tightening measures such as raising interest rates to tackle skyrocketing inflation.
As reported by Finbold on Sept. 3, Kitco News analyst Rajan Dhall noted that Bitcoin’s chances of exiting the extended bear market would be above $ 25,066 and initially target $ 21,760. Although several analysts have predicted that it will likely correct to $ 15,000, Dhall believes that if Bitcoin fails to hold around $ 20,000, the cryptocurrency could consolidate to as low as $ 17,567.
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