Bitcoin (BTC) is at risk of hitting its lowest monthly close since 2020. As the BTC is holding at only $20,000, a further loss is expected to take place in the future, as per data from Cointelegraph Markets Pro and TradingView.
“Equities market in general isn't looking good right now so this dip on $BTC is a reflection on that. September in general isn't historically a great month. Possibly dip here that ends up being buyers opportunity for following months. I'll be a spot buyer for long term on sub $20k,” said crypto analyst and Blockroots co-founder Josh Rager.
With BTC and USD crisscrossing at $20,000 levels, the pair failed to become successful again over the weekend, days before a new month.
Chance for deeper drop
Federal Reserve chair Jerome Powell earlier said that the interest rates might need to stay high to avoid inflation. The statement resulted in the current price of Bitcoin.
On Monday, the tokens increased by 0.8 percent and hit $20,142. Other cryptocurrencies experienced some decreases. Avalanche. for example, had an almost 6 percent decline.
“Bitcoin weakened after Fed Chair Powell didn’t blink with his reiteration that the Fed will tighten policy to bring down inflation,” said Oanda senior market analyst Edward Moya. “Risky assets are struggling as Powell’s fight against inflation will remain aggressive even as it will trigger an economic slowdown.”
Equities plunged across Asia, Europe, and the U.S. as well. It was recorded that the S&P 500 shed 0.5 percent at 9:51 a.m. in New York.
“Money is flowing out of risky assets. Crypto followed the sharp adjustment of the US stock market after Powell’s remarks," said consulting firm Venn Link Partners CEO Cici Lu. “Markets didn’t like what he had to say, and Bitcoin is resuming as a high-beta asset.”
$20,000 is a key point for Bitcoin, as pointed out by many strategists. Although levels of support could also drop lower.
“If Bitcoin doesn’t hold $20,000, then $18,900 comes into play before a date with the June intraday low of $17,600,” said Nexo co-founder Antoni Trenchev. “Close below that and it doesn’t look pretty.”
As per data from Coinglass, $288 million of crypto longs liquidated recently, making the past two weeks considerably tough within the crypto market. August 19 recorded the liquidation of $562 million of longs, breaking the record of June 13.
“Now that Powell came out standing firm on inflation, the probability of a crypto crash has increased significantly,” said Academy Securities head of macro strategy Peter Tchir.
Nearly 50% of BTC supply kept at loss
The profit share of the BTC supply dropped after the most recent price fall, reaching a level only seen during previous macro market bottoms, according to data by On-Chain College.
“I’ve been waiting all bear market for the Bitcoin Percent of Supply in Profit to drop below 50%,” On-Chain College said on Twitter. “In June, it bounced just above at 50.28%. Currently, it’s at 51.76%. This metric dropped below 50% in every prior bear market + March 2020.”