Bitcoin dropped to below US$20,000 in the sixth trading session, the longest time it has fallen since July when the market was shaken due to unrest.
On Thursday, cryptocurrency’s value dropped by 3.1% to $19 5,577.
Bitcoin in Free Fall
The largest cryptocurrency by market capitalization has been in free fall for the previous ten days as concerns over Wednesday’s FOMC minutes drove its price below $20,000. However, the cryptocurrency with the largest market cap has fallen for the last ten days as fears over Wednesday’s FOMC minutes drove its price below $20,000. Certain key information on-chain suggests that investors are increasing Bitcoin purchase and the price could be about to rebound from this low.
Market Analyst Jim Wyckoff foresaw the increase in volatility and cautioned in his morning Bitcoin brief that “quieter sideways trading continues, but probably not for much longer. The financial markets are susceptible to volatility, as demonstrated by history.
BTC/USD trades starting at $20k Source: TradingView
Wyckoff suggested that this might continue for some time, as long bullish traders outnumber bears.
“In the immediate future, expect increased cryptocurrency volatility. Wyckoff believes that the bulls will need to show more strength in order to reverse the decline seen on bitcoin’s daily chart, though it is only slightly.
Bitcoin average funding rates. Source: Santiment
Santiment, a cryptocurrency analytics firm, published this chart showing the rise in BTC average funding rate rates. It revealed that sentiment still remains negative about Bitcoin.
Fear overtakes hope
Now, the industry is just US$1 Trillion, which represents a third or less of its peak market worth in November. The collapse of Terra and Three Arrows Capital as well as the bankruptcy of Voyager broker, along with a rise in risk-aversion, caused a shakeup in coin prices.
Stephane Ouellette is chief executive officer of FRNT Finance Inc.
“There is a lot of fear that if we make new lows on BTC (as a proxy for the market), there will be another wave of crypto company defaults.”
Bloomberg
The fall on September’s first day is unfavorable for the bellwether currency. Every September since 2017 has witnessed a decrease in Bitcoin’s price, which makes it one of the most difficult months of the year. Bespoke Investment Group reports that the average monthly drop in Bitcoin’s value over five years has been 8.5%.
The overall cryptocurrency market cap now stands at $967 billion, and Bitcoin’s dominance rate is 39%.
UnSplash featured image and chart, Bloomberg and TradingView.com.