Although BTC is now trading near the lower end of its 76-day range, analysts believe that upcoming Fed moves and record-high open interest will enhance the likelihood of the next “deleveraging events.”
The price of Bitcoin (BTC) is still struggling at $20,000, and subsequent drops below this mark have prompted some analysts to forecast a deeper decline shortly. Independent market analyst Philip Swift tweeted earlier in the week that the Crypto Fear & Greed Index has plummeted back-to-back to “Extreme Fear,” signaling a calming investor attitude.
Uncertainty surrounds the potential catalyst for such an event. However, the price of Bitcoin might be affected by any extension of the current stock market fall, which saw the Dow and S&P 500 close out August with losses after wrapping up their fourth day of decrease. According to CNBC data, the Dow ended August by 4.1%, while the S&P 500 and Nasdaq lost 4.2% and 4.6%.
Bitcoin Will Hold $20K However, Analysts Say BTC Will Get Open:
Loretta Mester, president of the Cleveland Federal Reserve, said that she anticipates an increase in the benchmark interest rate beyond 4% and that it is highly improbable that there will be any reductions in rates throughout the entire year 2023. The Fed’s target range of 2.25% to 2.5% is above 4%.
Given the performance of the crypto markets since the Fed started hiking rates on July 26, 2022, and the BTC and equity markets exhibit a high degree of connection, it wouldn’t be unexpected to witness a prolonged decrease in the price of Bitcoin over the coming months.
On the other hand, traders still seem optimistic about the impending Merge. Since recovering from last week’s sell-off, Ether (ETH) and ETH staking-related coins have held up very nicely. Ether has increased 11.3% since reaching a low of $1,422 on August 28 and now trades just under $1,600. The biggest ETH staking service, Lido (LDO), is up 12% today and 32% from last week’s decline to $1.55.