When stock markets ascended from the June 2022 low, it sent Bitcoin (BTC) higher. BTC traded dangerously below $18,000 before climbing. This scared off bears. Last Friday, August 12, 2022, Bitcoin prices potentially peaked at $24,461.
The rally toward $28,000 ended.
Bitcoin is a barometer of the cryptocurrency speculator’s appetite for risk. The tech sector’s modest 2.28% weekly decline sent BTC prices even lower. Bankruptcies among platforms and crypto lenders are still unfolding. Demand for higher liquidity will keep rising. This will lower the trading volumes for Bitcoin.
Bitcoin’s breakdown could end at $21,000. If this fails, the drop to $20,000 would shatter the belief that BTC’s recent rebound will hold. Fearful BTC holders may sell the cryptocurrency from there. Chances increase further still that BTC re-tests the $18,000 low.
In early summer, Bitcoin’s below $18,000 did not last for more than a day. Speculators guessed correctly that BTC would bounce back. In September, institutional investors will return from their summer-long vacation. They will commit to either more fixed income holdings or speculative stocks. If they choose risk-free positions, this would hurt stock indices.
The Federal Reserve’s meeting in September will matter the most. The central bank’s commentary on inflation rates will set the market’s tone for the rest of the year.
