Bitcoin (BTC) experienced a sharp drop as the weekly close approached, causing the cryptocurrency to hover around $26,000 at the Sep. 24 Wall Street open. The uncertainty in BTC’s price trajectory became apparent as the support level of $26,000 was briefly breached. Sideways trading throughout the weekend turned sour at the beginning of the new week, resulting in bulls being unable to regain lost ground.
Analyst BaroVirtual, an ambassador for on-chain data platform Whalemap, pointed out that Bitcoin failed to break through a descending trend line resistance, and there is now a possibility of a little bearish right shoulder forming. He uploaded a daily chart snapshot showing a potential head and shoulders formation concluding. If this pattern is confirmed, BTC risks falling into the $22,000-$20,000 range, which hasn’t been seen on BTC price charts for the past six months.
Trader and analyst Rekt Capital, who had previously mentioned the possibility of BTC returning to the low $20,000s, now emphasized the importance of holding current levels as support. He suggested that if the $26,000 level starts acting as resistance, it could signal weakness in the $25,000-$26,000 range as a support. In that case, the price of Bitcoin could collapse into the $22,000-$24,000 region to find a new local bottom.
The strengthening of the U.S. dollar also posed a potential headwind for Bitcoin and the crypto market as a whole. The U.S. dollar index (DXY) reached its highest level since November 2022, after experiencing a 6.5% increase since hitting 15-month lows in July. Historically, a strong U.S. dollar has negatively impacted the performance of risk assets and the crypto market.
The CEO of crypto rating platform Evai, Matthew Dixon, noted that the rising DXY is detrimental to BTC and other risk assets. He had previously anticipated a potential decline in DXY strength, which would have allowed for a relief bounce in Bitcoin and altcoins.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risks, and readers are encouraged to conduct their own research before making any decisions.
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