Bitcoin and Ethereum prices went significantly down last week, but are expected to see a recovery in the upcoming days
Currently, the Bitcoin price fluctuates tightly between $19,500 and $18,000. Since it rejected the $20,000 barrier, it has oscillated between the low and high of this range. This has caused confusion and worry inside the cryptocurrency industry. According to the data asset management company Blofin, the number of contracts for the September quarterly deliveries is still in the millions. On September 30th, over 100,000 BTC options contracts and over 1.5 million ETH options contracts will expire. It is impossible to overlook the potential impact of these contracts on the cryptocurrency market.
BTC Reaches The Bottom
Bitcoin is presently valued at approximately $19,180. It has gained 2% in the previous 24 hours and 1% in the last week despite the volatility. The cryptocurrency fell near a multi-year low at $18,000 due to bearish pressure.
After the U.S. Federal Reserve raised interest rates last week, the price of Bitcoin plummeted. This resulted in selling pressure, which drove the cryptocurrency to its lowest level in more than two years. Since BTC’s price has been drifting downward since its all-time high of $69,000, these levels have provided crucial support. As selling pressure has increased, Bitcoin has remained at these crucial levels.
According to expert Justin Bennett, Bitcoin’s price movement is recreating a channel formed during the cryptocurrency’s rebound from a catastrophic crash in early 2022. Throughout this time frame, the Bitcoin price fluctuated between $37,500 and $49,000.
Bitcoin has been trading in a sideways channel for months. However, due to macroeconomic changes, the price of cryptocurrencies began to decline, resulting in another crisis in May 2022.
Bennett suggests that Bitcoin’s price may be building a channel similar to the previous crash after reaching the pattern’s bottom in late June. He predicts that the Bitcoin might reach $26,000 before plummeting to $18,000.
The price of Ethereum could fall even further.
Despite a big decrease this month, the Ethereum price has failed to respond to the bear assault. The severe downturn that began on September 10 prevented any attempts at a V-shaped reversal. This has generated a new hostile attitude against the intended union between Ethereum and blockchain technologies.
As of the time of writing, the Ethereum price is $1,331, and bulls are attempting to build a floor above the 200-week simple moving average. The ascending trend line and positive signal on the daily chart indicate that the market could be poised for a rebound. Due to the lack of daily closes above the eight-day exponential moving average, however, it is still too dangerous to enter the market.
Although it was anticipated that the preceding rise would result in a big increase in volume during the mid-June liquidations, it did not occur. Ethereum might retrace to the swing lows from June 18 and so invalidate the bearish knife scenario. Invalidation of this scenario would allow the market to surpass the swing high on September 11 at approximately $1789.
The rise in Bitcoin’s value is supported by macroeconomics.
Tom Dunleavy, senior analyst at Messari, remarked that rising interest rates could stimulate the cryptocurrency industry. Moreover, he stated that the link between asset classes such as stocks and Bitcoin has risen.
According to Dunleavy, sentiment on the financial markets has not been this high since the 2020 COVID-19 pandemic. This indicates that the market is experiencing a bear market. The Put/Call Ratio, which gauges the amount of purchased against sold option contracts, is 1. It may suggest a high degree of pessimism in global markets.
The last time the Put/Call Ratio reached the current level was during the multi-year bull run in the crypto and Bitcoin markets. Bennett noted that despite the current socioeconomic climate, momentum might bring the price to $26,000.