Bitcoin price has traded sideways on low periods after being rejected north of $20,000. The leading cryptocurrency by market cap benefited from Ethereum’s bullish “merge” momentum, but with that factor gone, the bears seem to be back in control.
At the time of writing, bitcoin price is trading at $19,200, down 14% over the past week and trading sideways over the past 24 hours. The cryptocurrency tumbled below a critical support zone around $18,500 over the weekend, giving bearish arguments new ammunition to forecast a fresh yearly low.
BTC price is moving sideways on the 4-hour chart. Source: BTCUSDT trade view
The last line of defense for bitcoin price?
Bitcoin price has been trending lower since late 2021 when it hit a new all-time high of $69,000. In the months that followed, Bitcoin lost over 80% of its value and plummeted to a yearly low of $17,600.
The cryptocurrency recovered from these lows and formed a short-term bottom at around $18,600. Over the past few days, BTC’s price has fallen to $18,200, which could indicate that the bears have gathered enough momentum to push the price to its yearly low and possibly fresh lows below $17,000.
In a post-merge crypto market, macro factors appear to have the greatest impact on the emerging asset class and traditional financial markets. Bitcoin has shown high correlation with major stock indices since the start of its downtrend.
According to analyst Josh Rager, the S&P 500 Index is looking “down” and could drag Bitcoin price with it. As mentioned, the cryptocurrency is in a critical support zone and a break below its current levels could open the door for a new downtrend. Rager advised traders to stay flat in US dollars while the market decides a direction:
This is the stock chart, it rejected the upper level and looks like it wants to go lower. BTC is hovering at support near $18,000-$19,000 for the fifth time. Things aren’t looking too good at the moment but maybe we’ll get a leap forward again… I’m stumped at the moment and will keep an eye on it.
The S&P 500 is moving into critical support. Source: Josh Rager via Twitter
The US Federal Reserve is ready to influence the Bitcoin price
According to Justin Bennett, in short timeframes the market seems to gravitate towards pools of liquidity created by leveraged traders. There was over $1 billion in Bitcoin long trading at around $18,850, which appears to be the mainstay of the cryptocurrency’s current price action.
Nothing beats a liquidity search to start your morning.
Nearly $1 billion in $BTC longs had accumulated at $18,850 on Binance alone.
These longs have been deleted. #Bitcoin pic.twitter.com/puGpyAltiv
— Justin Bennett (@JustinBennettFX) September 20, 2022
This status quo appears to be on the way to disruption as the Federal Reserve (Fed) is set to hold its Federal Open Market Committee (FOMC) meeting tomorrow. In it, the financial institution will share its view on current inflation and a possible rate hike above 75 basis points (bps).
Economist Alex Krüger is targeting a potential near-term price move lower, followed by further sideways movement if the Fed stays within market expectations. If there are surprises and the financial institution surges above 100 basis points, the crypto market could react to the downside.
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