While there are no apparent catalysts for the current decline, Federal Reserve Chairman Jerome Powell is expected to provide an update on Thursday on further steps the U.S. central bank plans to take to keep it at afloat the struggling economy.
With growing pessimism about an economic rebound, it is likely that many institutional investors will exit financial markets until there is more certainty.
Not only is the crypto market in shock today, the Dow Jones, S&P 500, and FTSE 100 are all down in the past 24 hours as well.
Short-term price levels to watch
Looking at the 4 hour BTC / USD chart, we can see that the major crypto has moved back into the major support area mentioned in a previous analysis.
This area of $ 11,400 has been critical short-term support for Bitcoin twice over the past two weeks and is now helping to slow the current downtrend again. It is possible that we could see this support pushing the price action sideways into a narrow range between the $ 11,400 mark and the 100 EMA (red line) above if the bulls can return to that level before the close. .
If that crucial level fails, however, we could see temporary security at the $ 11,120 line, which caught up with the low of the August 11 crash before Bitcoin strongly recovered its YTD high of $ 12,470.
Below that we have the second major support area around the $ 11,000 mark, which has not been revisited since July 31st. A reduction to this level would set a new 25-day low for BTC prices.
Below $ 11,000 we have $ 10,500 which was the previous 2020 high which was broken last month and should provide support.
Looking at the 50 EMA and 100 EMA (blue and red lines, respectively) on the 4 hour chart, we can see that we are very close to having a bearish convergence. This would be a bad sign for BTC traders and could cause further panic in the market.
On the RSI, the indicator line is really close to moving back into the oversold region. This may be the Bitcoin bulls’ only hope in the near term to help spur another temporary rally, as it did on August 22.
Total market capital: $ 369 billion
Bitcoin market capital: $ 210 billion
Bitcoin dominance: 57.0%
Bitstamp BTC / USD 4 Hour Chart
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