Bitcoin and other cryptocurrencies made a comeback on Tuesday following a recent downturn to multi-month lows. However, the downward momentum may prove to be a challenge for cryptos as concerns typically associated with the month of September start to take hold.
Bitcoin’s price has remained relatively stable over the past 24 hours, hovering around $25,800. It has managed to recover from a significant selloff that briefly pushed it below $25,000 on Monday. This drop marked the lowest levels since mid-June and occurred without any major catalysts. Despite the rebound, Bitcoin remains at risk near crucial technical levels and below the $26,000 mark, which has served as a support level for the largest digital assets throughout most of the previous month.
According to Samer Hasn, an analyst at broker XS.com, the decline in cryptocurrencies can be attributed to negative market sentiment. Traders seem to be spooked as significant volumes of digital assets are being transferred from wallets to exchanges. Hasn highlights that such transfers are typically viewed as a negative sign since they indicate an intention to sell or swap cryptocurrencies.
Bitcoin Bracing for September Slump
It appears that Bitcoin’s stagnant trading pattern, characterized by historic lows in both volatility and trading volumes, might soon come to an end. The upcoming month of September has consistently proven to be the worst month for Bitcoin, experiencing six consecutive years of decline.
On Monday, there were early indications of the intense market movements that traders have been anticipating, given the presence of significant macroeconomic factors. According to Katie Stockton, a managing partner at technical research firm Fairlead Strategies, Bitcoin remains vulnerable to the $25,200 technical price level. If a more substantial breakdown occurs, it could potentially plummet further to $23,200.
Although short-term oversold conditions are currently in place, they may not be sufficient to counteract the downward momentum. Stockton believes that weakened intermediate-term momentum makes it increasingly challenging for Bitcoin to achieve a sustained rebound.
Looking beyond Bitcoin, Ether, the second-largest cryptocurrency, experienced a minor decline of less than 1%, reaching $1,580. Meanwhile, altcoins displayed a mixed performance: Cardano saw a slight increase of less than 1%, while Polygon slipped by 2%. Dogecoin and Shiba Inu also made modest gains of less than 1%.
The market for cryptocurrencies remains uncertain as September begins, with traders bracing themselves for potentially turbulent times ahead.