The price of Bitcoin is currently trading at $26,000 and its cumulative value in the crypto market has declined to $1.05 trillion. Bitcoin dominance remains at 48.5% while trading volume continues to be low. In the recent drop, the trading volume, which had surpassed $70 billion, has once again fallen below $30 billion. So, what has been happening in the crypto market in the short term and what can we expect? What does the overall market outlook tell us about Bitcoin?
What’s Happening with Cryptocurrencies?
Federal Reserve Chairman Jerome Powell warned today in his Jackson Hole speech that inflation is still high and the central bank is open to raising interest rates further if necessary. Expectations of interest rate hikes next month have increased. Is excessive optimism taking another hit? Yes, absolutely.
However, the fact that the US stock markets recovered during the day after a short selling wave was a positive sign. Pantera Capital and many other experts are focused on the upcoming halving event, which supports this narrative. If cryptocurrencies repeat what they have done in previous cycles, the boredom of these days could be remembered as a smile on our faces next year.
Bitcoin (BTC) Price Analysis
Most cryptocurrencies, including BTC and altcoins (excluding stablecoins, of course), share a positive correlation with Bitcoin. The scary thing is that many of them are trading near their support levels, even close to their all-time lows (ATL). A potential 10% drop in Bitcoin could have a magnifying effect on altcoins.
Now, looking at the current view of the Bitcoin price, on August 23, the price once again retreated from the $26,833 resistance level, indicating continued selling pressure at resistance levels. The last time we said this, the price was turning back from the $29,700 resistance.
If the selling pressure continues, the BTC price could remain trapped between $26,833 and $24,800. A tight consolidation near the support of a range indicates a lack of aggressive buying by bulls, which is a bearish sign. The downward sloping 20-day exponential moving average ($27,463) and the relative strength index (RSI) in oversold territory suggest that bulls may have given up.
If BTC closes below $24,800, we could see a rapid drop to the $20,000-22,000 range triggered by futures liquidations and panic selling. Bulls need to close above the 20-day EMA. If they succeed, a revisit to the $29,055 price level is possible.
