Market News

Bitcoin Rebounds. But It Might Not Be Able to Overcome Momentum. - BARRONS

SEPTEMBER 12, 2023

BitcoinBTCUSD +3.36>#/span###  and other cryptocurrencies rebounded Tuesday from a selloff to multi-month lows, but the downside momentum may be too much to match for cryptos as the seasonal September worries take hold.

The price of Bitcoin has traded essentially flat over the past 24 hours near $25,800, but has rebounded from a meaningful selloff that briefly sent it below $25,000 on Monday—the lowest levels since mid-June—that came amid an absence of any major catalysts. Bitcoin remains vulnerable near key technical levels and below the $26,000 mark that has provided support to the largest digital assets for much of the past month.

“The declines in cryptocurrencies came as negative sentiment continued to flow into the markets,” said Samer Hasn, an analyst at broker XS.com, noting a spooked attitude among traders amid significant volumes of digital assets moving from wallets to exchanges. “Huge transfers to cryptocurrency exchanges are usually translated as a negative sign, since these transfers are due to the intention to sell or swap cryptocurrencies,” Hasn added.

It looks like the only reprieve from Bitcoin’s historic trading lull—with the crypto seeing its lowest volatility ever this summer and notching the lowest trading volumes in August since 2019—may be the September scaries. Like the Dow Jones Industrial Average and S&P 500, September tends to be the worst month of the year for Bitcoin, which has fallen for six consecutive Septembers.

The price action Monday may be just the first of the fierce moves traders have been bracing for this week with macroeconomic catalysts looming. Bitcoin remains vulnerable to the $25,200 technical price level, noted Katie Stockton, managing partner at technical research firm Fairlead Strategies, with downside risks as far as $23,200 if a more decisive breakdown occurs.

“Short-term oversold conditions are in place but may be no match for downside momentum,” said Stockton. “We would defer to weakened intermediate-term momentum which could make it difficult for Bitcoin to see a durable rebound.”

Beyond Bitcoin, EtherETHUSD +3.37>#/span###  —the second-largest crypto—was down less than 1% at $1,580. Smaller tokens, or altcoins, were mixed, with Cardano up less than 1% and PolygonMATICUSD +1.68>#/span###  slipping 2%. DogecoinDOGEUSD +1.58>#/span###  and Shiba InuSHIBUSD +2.13%  advanced less than 1%.


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