The overall crypto markets are already reacting to US Fed Reserve Chair Jerome Powell’s speech today, with Bitcoin’s recent advance failing to break through the $22,000 barrier. Bitcoin is now losing support at $21,000 and is at risk of entering a deeper bear trend. BTC/USD is now experiencing a downside correction after reaching an intraday low of $20,524 at the time of this post. Bitcoin is trading at around $20,635 at more than a 1% daily loss and a 3% weekly decline. The value of the cryptocurrency has dropped 1% in the last month. After hard losses, we might see BTC transitioning to sideways movement amid downside potential. Bitcoin took a hit, moving in lockstep with equities as Fed Chairman Jerome Powell said the Fed will continue to raise rates to fight inflation in his Jackson Hole speech. The majority of the cryptocurrencies paired with the USD had a mild to a severe selloff. The cryptocurrency market is uncertain of how long the impact will last. Investors, from retail investors to investment banks, are shocked as they expected the summer rally to continue.
Key Levels
Resistance Levels: $28,000, $25,000, $22,000
Support Levels: $20,000, $17,500, $15,000
BTC/USD Daily ChartBTC/USD made several rebound attempts during the week, reaching a level of $21,925, but then reversed after failing to break higher. The initial bias for this week is slightly negative. The ongoing selloff might hit the horizontal support, which is currently at $20,000. Another collapse might be seen for confirmation of the $20,000 support level in this scenario.
Positively, rather than retesting the level of $20,000, the initial support level beyond $20,500 may shift bias back to the upside. However, a significant breach of the $22,000 level may confirm a medium-to-long-term bottom and change the trend to bullish initially for the $25,000 level of resistance. If a rebound occurs, the upward trend from the $17,567 (low) level may continue.
BTC/USD 4-Hour ChartTechnical indicators slacken within positive levels, all of which suggest a waning bullish focus. According to the 4-hour chart, the pair might rebound at the $20,000 horizontal support line on the level, and technical indicators might recover from the oversold relative strength index (RSI) readings, limiting the bearish potential in the short term.
On the other hand, if the moving average (MA 50 and MA 200) continues to be higher than the present level. The BTC/USD may need to bounce back above the $22,000 level for the bearish case to lose the appeal. Otherwise, we might see BTC transitioning to sideways movement amid downside potential.
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