- Bitcoin trades sideways at $11,300 after failing to sustain the breakout above $12,000
- Analysts are expecting more pullback to consolidate the momentum
- Crypto markets are awaiting the upcoming speech from the chairman of the Federal Reserve
With Bitcoin currently moving in the $11,400 range, a number of analysts have suggested this level would not be sustained in the future. They say a drop to $10,000 appears imminent in the coming days as the market awaits Federal Reserve chairman Jerome Powell’s speech Thursday where he is likely to speak about new measures to stimulate the U.S. economy.
After the ascent above $12,000, Bitcoin failed to sustain the momentum and continued to descend even to as low as $11,100. The current range is at $11,100 to $11,600. As Bitcoin moves above its 10-day moving average but below its 50-day average, Coindesk reported this is a sideways-turning-bullish signal for market technicians.
Various analysts are suggesting that breaching past $12,000 would be unlikely in the short-term. It is within possibility that the benchmark cryptocurrency is bound to revisit $10,000 soon.
“There is room for further near-term downside with support in the $10,000 to $10,055,” said Katie Stockton, an analyst at Fairlead Strategies. Speaking with Coindesk, she said this pullback is healthy for Bitcoin to gain momentum it had lost when selling pressure pushed the price below $12,000 in the previous days.
Chris Thomas, head of digital assets at Swissquote Bank, said another event that would affect the price of Bitcoin is the upcoming expiration of $65,000 BTC options, worth over $700 million, a majority of which at derivatives exchange Deribit. Thomas believed traders would try to push the price either at $11,000 or $12,000 with different goals. “$11,000 would be a buying opportunity and $12,000, we’d likely see further selling,” he told the news outlet.
Some also believe the key to a new rally is overcoming $11,500. According to NewsBTC, the major hurdles near the trend line are the $11,500, $11,550 and the 100 hourly simple moving average. The outlet explained that overcoming these hurdles will increase the chances for Bitcoin to return to $12,000 level.
The entire crypto market is awaiting Powell’s speech at this year’s virtual Jackson Hole Economic Symposium. Powell is likely to detail a set of measures aimed at pushing inflation higher to a healthy level, CNBC reports.
If Powell says the economy is not recovering on the rate they expect, it’s possible that measures such as quantitative easing (QE) might be implemented. Such measures would increase money supply, which in turn, could lead to the further weakening of the U.S. dollar. Ultimately, a weaker dollar could motivate investors to seek stores of value such as Bitcoin and gold. This could lead to higher prices because Bitcoin and gold are scarce assets.