Bitcoin and other cryptocurrencies experienced a bounce back on Tuesday following a recent selloff that drove prices to multi-month lows. However, the downside momentum may prove challenging for cryptos as September brings its own set of worries.
Bitcoin Holds Steady, Recovers from Selloff
The price of Bitcoin has remained largely unchanged in the past 24 hours, hovering around $25,800. Nevertheless, it has managed to recover from a significant selloff that temporarily pushed it below $25,000 on Monday. This drop marked the lowest levels since mid-June and occurred without any notable catalysts. Despite the recovery, Bitcoin remains vulnerable as it teeters near crucial technical levels and sits below the $26,000 mark, which has served as a support level for the leading digital assets throughout the past month.
Negative Sentiment and Significant Transfers
According to Samer Hasn, an analyst at broker XS.com, the decline in cryptocurrencies is a result of negative sentiment permeating the markets. Traders presently possess a spooked attitude, primarily due to substantial volumes of digital assets being transferred from wallets to exchanges. Hasn further adds that these large transfers are typically viewed as a negative sign since they indicate an intention to sell or swap cryptocurrencies.
While Bitcoin and other cryptocurrencies have bounced back from recent lows, attention turns towards the lingering concerns that frequently accompany the month of September. These worries may continue to impact the crypto market as investors navigate through the turbulent landscape.
Bitcoin Braces for September Scaries
Bitcoin, the leading cryptocurrency, has been experiencing an unprecedented period of low volatility and trading volumes. However, this calm may soon come to an end as September, historically the worst month for Bitcoin, arrives. In fact, Bitcoin has seen a decline in six consecutive Septembers.
Yesterday's price action might just be the beginning of the intense movements that traders have been anticipating this week, given the looming macroeconomic catalysts. At present, Bitcoin remains susceptible to a technical price level of $25,200, according to Katie Stockton, managing partner at technical research firm Fairlead Strategies. In the event of a more significant breakdown, the downside risk could extend as far as $23,200.
Stockton warns that while short-term oversold conditions are present, they may not be enough to counteract the downward momentum. She explains that weakened intermediate-term momentum could hinder Bitcoin's chances of experiencing a sustained rebound.
Apart from Bitcoin's performance, Ether, the second-largest cryptocurrency, has seen a marginal decline of less than 1%, currently standing at $1,580. Altcoins, such as Cardano and Polygon, have had mixed results with Cardano witnessing a slight increase and Polygon slipping by 2%. Dogecoin and Shiba Inu have also experienced minor gains.
It remains to be seen how Bitcoin and other cryptocurrencies will navigate through September amidst uncertain market conditions.