Bitcoin is Falling as Analysts See More Declines Ahead
WORLD, Sept. 5 – Bitcoin and other cryptocurrencies slipped lower on Tuesday as digital assets continued to languish at relatively depressed levels. Analysts are eyeing weakness in technical factors, suggesting more declines may be coming.
The price of Bitcoin fell 1% over the past 24 hours to $25,750, retreating further from the $26,000 level that has provided stability to the largest digital asset for most of the past month. While Bitcoin has notched temporary gains — including a spike to $28,000 last week after a pro-crypto court ruling — prices have failed to consolidate higher.
“Bitcoin has been pegged at $26,000 for more than two weeks. An attempt to move back above the 200-day average has technically encountered stronger selling, confirming that the bears are not relinquishing market control,” said Alex Kuptsikevich, an analyst at broker FxPro. “This…suggests higher risks that the consolidation will end with downside momentum, potentially at $25,000 or even $24,000.”
Macroeconomic catalysts are likely to continue affecting cryptos, which — like the Dow Jones Industrial Average and S&P 500 in the stock market — remain sensitive to the outlook for interest rates, which affect demand for risk-sensitive assets, News Wire Reports.
However, digital-asset traders continue to focus in particular on coming decisions from the Securities and Exchange Commission (SEC) about applications for spot Bitcoin exchange-traded funds (ETFs). Holding Bitcoin, such ETFs have been heralded as a key catalyst for crypto prices. While the SEC recently delayed decisions on several applications until October, crypto bulls remain upbeat that approval is a matter of time, and analysts have debated to what extent a decision is already priced in.
When an SEC decision finally comes, “the stronger scenario leans toward a decline as Bitcoin approaches the support level of $24,995 and extends losses to the critical support level of $24,000,” said Rania Gule, an analyst at broker XS.com. “In the worst-case scenario, Bitcoin’s price could drop to the demand zone between $21,711 and $20,155. These predictions draw strength from signals from the Relative Strength Index (RSI), which is currently decreasing, indicating bearish momentum.”
Beyond Bitcoin, Ether — the second-largest crypto — lost less than 1% to $1,630. Smaller tokens, or altcoins, were more upbeat, with Cardano trading above flat and Polygon up 3%. Memecoins were more mixed, with Dogecoin gaining 1% but Shiba Inu shedding 2%.
Write to Jack Denton at jack.denton@barrons.com
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