Bitcoin price is attempting a recovery on a lower time frame as the cryptocurrency struggles to gain above $19,000 and prevents further downside. The selling pressure has persisted in the last 24 hours and the market sentiment has again turned into fear.
Next week, the crypto space will pass a major milestone as Ethereum completes its transition to a proof-of-stake (PoS) consensus. Check out our analysis of the potential impact on the price of Ethereum and what to expect for the crypto market.
At the time of writing, bitcoin price is trading at $18,900 with a 5% loss over the past day and seven days, respectively. The rest of the cryptocurrency market has retained some of its gains over the past few weeks, but the bullish momentum in Ethereum (ETH) and Cardano (ADA) may fade.
Why Bitcoin Price Should Reclaim These Levels
According to cryptocurrency analyst Justin Bennett, bitcoin price was almost able to maintain an important support area as selling pressure intensified yesterday. The cryptocurrency was moving in a tight range and flirting with the level north of $20,000 but ultimately the bears won the round leading to a decline in price action.
As seen below, bitcoin has been bouncing from yesterday’s lows at around $18,600 since June 2022. At that time the crypto market was in a downtrend and was on track for a longer period of consolidation on the higher time frame.
This consolidation continues as the bulls have been able to defend the current levels for the price of bitcoin, but the cryptocurrency is in a crucial zone. Bennett Told Here are the levels that BTC price should retest in order to prevent further losses:
The #Bitcoin chart is pretty straight forward. The $19k area is support. Below this on a daily close basis, we probably see at least $17,600, if not much lower. BTC bulls need to reclaim $19,700 to see $20,500 and a potential $21,400. I still don’t think that’s down.
The cryptocurrency has managed to reclaim some ground so far, but the bulls should either push the price to around $19,000 on a daily close or risk turning this support area into resistance.
Inflation Could Take Another Hit, Will BTC Rebound?
Over the next few days, the US will release its August Consumer Price Index (CPI) print, a metric used to measure inflation in dollars. July’s CPI print indicated a possible slowdown in inflation, and the upcoming results could provide some room for the Federal Reserve (Fed) to ease its monetary policy.
According to Bloomberg Intelligence Mike McGlone, a fall in the price of crude oil, an important commodity when measuring the CPI, could cause the price of bitcoin to rally. In the long run, the expert believes that today’s macroeconomic outlook will lead the world to “enter a deflationary recession”.
This legacy could lead to major changes in the financial system, reinforcing bitcoin’s role as one of the world’s most important stores of value alongside gold and US bonds. McGlone Told,
This outlook is gaining traction in early September as indicated by a fall in commodities, rising expectations of a hike in global GDP and interest rates.