Bitcoin erases latest advance, hovering again around 26,000 – Crypto News
September 1, 2023 12:27 pm
Bitcoin started September in a choppy trading session, following an 11% drop in August, which is its worst monthly performance since November 2022. The king of cryptos has exhibited high volatility in the current week, with yesterday’s slump completely erasing Tuesday’s solid rally that came on the back of positive developments on the regulatory front. Historically, September is a tough month for cryptos as Bitcoin has posted a red monthly candlestick in each of the past six Septembers, will the streak break this time?
Cryptos lack bullish drivers
August was a really bad month for cryptos and risky assets in general as major US indices also fell for the first time since February on a monthly basis. Bitcoin posted its biggest monthly decline since November 2022, which was characterised by the collapse of one of the biggest exchanges in the world at that time, FTX. Hence, it’s clear that the 2023 crypto rally is under pressure, with the broader space lacking positive catalysts or even a bullish narrative.
Lately, we have been getting some soft data from the US economy, underscoring the case of no further rate hikes by the Fed, while any sharp deterioration could easily spark speculation of faster rate cuts. Stock markets cheered those developments, with both the S&P 500 and Nasdaq 100 attempting to push higher and revisit their 2023 highs. On the other hand, cryptos have failed to capitalise on that news, exhibiting once again signs of decoupling from risk-sensitive assets.
Focus on regulation
The latest moves in crypto space revealed once more that traders are mostly focused on developments stemming from the regulatory front. On Tuesday, digital assets recorded solid gains after a federal court decided that the Security and Exchange Commission (SEC) acted arbitrarily by denying Grayscale’s plan to convert a Bitcoin trust into a spot-Bitcoin ETF. This court win was perceived as a decisive step towards the eventual approval of ETFs that track the spot price of Bitcoin from many leading asset management firms.
Nevertheless, the grace period proved to be short-lived as on Thursday the SEC announced that it will delay decisions on spot ETFs until October. Markets reacted forcefully to this decision, with digital coins erasing all their earlier gains in the week. This volatility was also evident at the famous Bitcoin Fear and Greed index, which jumped from 39 to 52 on Tuesday before reversing back to 40 on Friday.
Heading towards fresh lows?
From a technical perspective, BTCUSD posted a bullish breakout from its tight range on Tuesday, which got capped by the 200-day simple moving average (SMA). Following this rejection, the price declined further, currently hovering around the $26,000 mark.
To the downside, if bullish pressures persist, the price could re-test the recent support of $25,350 ahead of the June low at $24,750.
Alternatively, should the price jump above the 200-day SMA, the bulls could aim for $28,550, which has served as both support and resistance in recent months. A break above that zone could turn the spotlight to the $30,000 psychological mark.
Bitcoin started September in a choppy trading session, following an 11% drop in August, which is its worst monthly performance since November 2022. The king of cryptos has exhibited high volatility in the current week, with yesterday’s slump completely erasing Tuesday’s solid rally that came on the back of positive developments on the regulatory front. Historically, September is a tough month for cryptos as Bitcoin has posted a red monthly candlestick in each of the past six Septembers, will the streak break this time?
Cryptos lack bullish drivers
August was a really bad month for cryptos and risky assets in general as major US indices also fell for the first time since February on a monthly basis. Bitcoin posted its biggest monthly decline since November 2022, which was characterised by the collapse of one of the biggest exchanges in the world at that time, FTX. Hence, it’s clear that the 2023 crypto rally is under pressure, with the broader space lacking positive catalysts or even a bullish narrative.
Lately, we have been getting some soft data from the US economy, underscoring the case of no further rate hikes by the Fed, while any sharp deterioration could easily spark speculation of faster rate cuts. Stock markets cheered those developments, with both the S&P 500 and Nasdaq 100 attempting to push higher and revisit their 2023 highs. On the other hand, cryptos have failed to capitalise on that news, exhibiting once again signs of decoupling from risk-sensitive assets.
Focus on regulation
The latest moves in crypto space revealed once more that traders are mostly focused on developments stemming from the regulatory front. On Tuesday, digital assets recorded solid gains after a federal court decided that the Security and Exchange Commission (SEC) acted arbitrarily by denying Grayscale’s plan to convert a Bitcoin trust into a spot-Bitcoin ETF. This court win was perceived as a decisive step towards the eventual approval of ETFs that track the spot price of Bitcoin from many leading asset management firms.
Nevertheless, the grace period proved to be short-lived as on Thursday the SEC announced that it will delay decisions on spot ETFs until October. Markets reacted forcefully to this decision, with digital coins erasing all their earlier gains in the week. This volatility was also evident at the famous Bitcoin Fear and Greed index, which jumped from 39 to 52 on Tuesday before reversing back to 40 on Friday.
Heading towards fresh lows?
From a technical perspective, BTCUSD posted a bullish breakout from its tight range on Tuesday, which got capped by the 200-day simple moving average (SMA). Following this rejection, the price declined further, currently hovering around the $26,000 mark.
To the downside, if bullish pressures persist, the price could re-test the recent support of $25,350 ahead of the June low at $24,750.
Alternatively, should the price jump above the 200-day SMA, the bulls could aim for $28,550, which has served as both support and resistance in recent months. A break above that zone could turn the spotlight to the $30,000 psychological mark.
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