Bitcoin’s (BTC) attempts to rally above the crucial $20,000 psychological level have faltered as bears appear too strong in the wake of prevailing macroeconomic factors. Consequently, technical analysis points to a more gloomy future for the flagship cryptocurrency.
In particular, a summary of Bitcoin’s one-day technical analysis as of September 4 points to a strong sell at 16 while neutral levels stand at nine. At the same time, none of the analysis recommends buying the asset at the moment.
A breakdown of the technical analysis shows that oscillators suggest a sell at two while nine are expressing neutrality. Based on the moving average, technicals point 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.
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This comes as Bitcoin continues to trade below its 200-week moving average, a metric that has historically given insight into what stage of the top crypto market cycle it is in. The asset has been trading in the zone for nearly two months.
Bitcoin extends loses below $20,000
It is worth noting that Bitcoin briefly rallied above $20,000 on September 2 following a strong U.S. jobs report. The asset momentarily propelled the general market to reclaim the $1 trillion capitalization. However, Bitcoin has since corrected trading at $19,800 by press time, with losses of almost 2% in the last 24 hours.
Overall, Bitcoin has traded around the $20,000 level for several weeks after making short-term gains that saw the price top $25,000. The price movement has inspired a section of analysts to suggest that Bitcoin might have found its bottom.
For instance, with the Bitcoin monthly Relative Strength Index (RSI) hitting 42.2, crypto analyst PlanB has suggested it could signal the asset is ready for another rally based on historical trading trends.
“Bitcoin RSI 42.2. If history is any guide, RSI could be 90+ in 1-3yrs time, unless you think history says nothing about the future and this time is different. Your choice,” he said in a tweet on September 2.
Bitcoin’s next course
Notably, the current Bitcoin price movement aligns with analyst projections that a strong job report for August will drive more correction in the crypto market.
This follows Bitcoin’s high correlation with the stock market amid the prevailing high inflation environment. Therefore, the stronger-than-expected job report would likely push the Federal Reserve to implement more aggressive tightening measures like raising interest rates to tackle the skyrocketing inflation.
As reported by Finbold on September 3, Kitco News analyst Rajan Dhall, noted that Bitcoin’s chances of exiting the extended bear market would be to rally above $25,066 by first targeting $21,760. Although several analysts have projected it will likely correct to $15,000, Dhall believes that if Bitcoin fails to hold around $20,000, the crypto could consolidate to a low of $17,567.
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