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Bitcoin Plunges Below $20,000, Extending Second Weekly Retreat

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Bitcoin Plunges Below $20,000, Extending Second Weekly Retreat

Cryptocurrencies mirrored global markets and fell after Jerome Powell warned of premature policy easing, with Bitcoin dipping below the lower end of the narrow range it traded over the past few months. last two weeks.
“Powell’s admission that there will be pain before there is relief is rather hawkish,” said Josh Olszewicz, head of research at digital asset fund manager Valkyrie Investments.

The market’s biggest cryptocurrency lost as much as 3.4% to $19,947.32 on Saturday at 2:40 p.m. Singapore, dipping below $20,000 for the first time since July 14 and extending its rout this year at 57%. It traded in a range between this level and around $22,000 last week.

Ether slid as much as 5.5% to $1,471.41. Solana and Avalanche fared less well, dropping as much as 6.4% and 6.9%.

Even so, some analysts say the recent trade pattern presents a buying opportunity:

  • Onchain metrics “signal that price is in the accumulation zone, which has historically been market bottom formations and value investments,” CryptoQuant said in a report on Thursday.
  • “Friday’s break looks large and negative in the short term, but should align with buying opportunities in early September as cycles remain bullish and forecast higher prices through November 2022,” said Mark Newton, technical strategist at Fundstrat, in a note Friday.

Powell, the Federal Reserve president, signaled that the US central bank would likely continue to raise interest rates and leave them high for some time to eradicate inflationand he pushed away any idea that the fed would soon back down. Low rates are seen as one of the catalysts to push investors into crypto during the Covid lockdowns.

Ether had outperformed the broader crypto market for the past few weeks amid optimism about a pending network software update called Merge.

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