Bitcoin is stubborn enough to hold tightly onto the $19,000 to avoid a downward plunge. Since entering the ascending channel in mid-September, the popular cryptocurrency continues to trade sideways.
A price increase over the next couple of months is expected because of the bullish nature of the technical formation and a drop in the selling pressure from miners. An independent analyst highlighted that Bitcoin’s price formed a 1-2-3 Reversal Pattern on a daily time frame. It’s likely to flip onto the $20,000 side soon. Bitcoin mining companies have been troubled for some time now, such as Stronghold Digital Mining declared a debt restructuring on August 16. And Core Scientific sold around 12,000 BTC between May and June, whereas publicly traded mining companies sold 200% of their Bitcoin production.
StoneysGhoster, Bitcoin enthusiast, believes excessive leverage caused the forced selling and not the mining activity. He said Bitcoin is grinding sideways around $20,000 because public miners are in trouble and have to sell all their Bitcoin. The enthusiast outlined that taking out a bunch of debt was a bad idea.
Even if Bitcoin attains the $20,000 level, investors fear a stock market crash as central banks continue to increase interest rates to tackle inflation. A run for the $21,000 – $28,000 range while limiting losses below $19,000 seem the most prudent. As such, options markets provide more flexibility to develop custom strategies.
In regards to volatility, BTC hit a two-year volatility low. This emerged as Bitcoin was battered by the prevailing macroeconomic factors characterized by high inflation and interest rate hikes. A section of the crypto industry has sounded concerns about Bitcoin’s low volatility. They fear the price could drop further. The chief investment officer at Valkyrie Investments, Steven McClurg believes the volatility will accelerate further as Bitcoin continues to be weighed down by the prevailing macroeconomic conditions. Moreover, the cryptocurrency continues to record a muted trading volume. It’s also unusual as Bitcoin’s rate has dived below some stock market products like the Dow Jones index.