Bitcoin appeared stuck around $20,000 on Sunday as part of a broader cryptocurrency market pullout, amid concerns about the path of the Federal Reserve’s rate hike.
The largest token was little changed at 7:45 a.m. in New York. That’s after a two-day drop of 7.6%, moving along with US stocks on Friday after Fed Chairman Jerome Powell’s speech at the Jackson Hole Conference.
The broader crypto market pulled back on Sunday, with the MVIS CryptoCompare Digital Assets 100 Index falling 1% on its fourth straight day of declines. “The money comes out of risky assets.
Cryptocurrencies followed the sharp U.S. stock market adjustment after Powell’s comments, said Cici Lu, chief executive of consultancy Venn Link Partners. resuming as a high beta asset.”
The $20,000 level acted as support for Bitcoin as it hit lows in recent months, but the cryptocurrency had risen in recent weeks. Prior to Saturday, it hadn’t been below $20,000 since July 14, and had even surpassed $25,000 in early August.
The gyrations have come amid uncertainty over the path and magnitude of the Fed’s rate hikes, and the effect they could have on riskier assets.
Numerous strategists have pointed to $20,000 as a key point for Bitcoin, although support levels could be lower as well. Katie Stockton of Fairlead Strategies sees long-term support in the area of $18,300 to $19,500.
Fundstrat strategist Mark Newton has pinpointed some key areas in the $19,000 range, with a “real area of importance” around $17,500, near the June lows and would allow for a 100% alternative wave projection. of the most recent drop since mid-August, it said in a note on Friday.
The past two Fridays have been rough on the crypto market, with $288 million worth of crypto liquidated in the most recent, according to data from Coinglass. On August 19, $562 million in long positions were liquidated, the most since June 13.
The second-largest cryptocurrency Ether was flat around $1,500 on Sunday after falling 13% in the previous two days. It has been fluctuating in recent weeks ahead of its long-awaited Merge update, which is due in mid-September.
“Ethereum’s drop ahead of the impending merger is also important as bearish sentiment appears to be taking hold across all so-called risk assets,” Bitfinex analysts said in a note on Friday. “The volatility that has become so characteristic of the digital token space shows no sign of abating.”
BLOOMBERG