Bitcoin rebounds despite “death cross”

As we had cited in our article dated August 22^nd:

“… September’s seasonality may spell more trouble ahead for Bitcoin bulls.”

The world’s largest crypto is already down by about 1% so far in September.

 

This week, Bitcoin also formed a “death cross”, with its 50-day simple moving average (SMA) crossing below its 200-day counterpart.

A “death cross” typically sends a bearish signal, indicating more price declines ahead.

However, Bitcoin bulls instead adopted a “never-say-die” attitude and helped prices rebound back towards the psychologically-important $26k mark at the time of writing.

It made sense that Bitcoin would find support around the $24,800 level, as this price region:

• also offered price support back in mid-June
   
• served as a resistance area last February

 

Why has Bitcoin been languishing?

Recent news that now-bankrupt FTX could sell its digital assets, which include US$560 million worth of Bitcoin, has soured sentiment surrounding cryptos.

 

Furthermore, as mentioned in our August 22^nd article:

Bitcoin’s summer lull has been upended by persistent fears that the Fed will keep US interest rates higher for longer.

The above notion has fed into the US dollar’s recent strength as well as elevated US Treasury yields, which in turn cast downward pressures on Bitcoin as well as the wider crypto universe.

In addition, the broader crypto market still has to contend with a lack of liquidity, as major players continue to wade through the regulatory uncertainty following last year’s high-profile implosions.

This has severely crimped Bitcoin’s ability to fully relish Grayscale’s recent legal win, nor the prospects of BlackRock’s Bitcoin ETF

 

To be clear, Bitcoin still holds a year-to-date gain of over 55% at the time of writing.

However, it still remains more than 60% below its all-time high, just shy of the  $69k mark, registered in November 2021.

If the $24,800 support line finally gives way, it may revisit the low-$20k region that we last saw in Q1 2023, while snuffing out more of its year-to-date gains.