Bitcoin Bounces Back from June Lows, But Faces Strong Downside Momentum

Cryptocurrencies, including Bitcoin, experienced a rebound on Tuesday after a recent selloff that brought them to multi-month lows. However, concerns related to the traditional September market trends may continue to put pressure on the crypto market.

Bitcoin’s price remained relatively stable in the past 24 hours, hovering around $25,800. This came after a significant drop that briefly pushed it below $25,000 on Monday, marking its lowest point since mid-June. The decline happened without any major catalyst, and Bitcoin still faces vulnerability around key technical levels, particularly the $26,000 mark that had acted as support in the previous month.

Negative sentiment has been affecting the cryptocurrency market, as observed by Samer Hasn, an analyst at broker XS.com. He pointed out that a substantial volume of digital assets has been moving from wallets to exchanges, which is usually interpreted as a sign of potential selling or swapping intentions among traders.

Bitcoin has been experiencing historically low volatility and trading volumes this summer, making it quite stagnant. However, September has historically been a challenging month for Bitcoin, often witnessing price declines for six consecutive years.

The price movement on Monday could be just the beginning of what traders have been preparing for, with macroeconomic factors looming in the background. Katie Stockton, managing partner at the technical research firm Fairlead Strategies, noted that Bitcoin remains vulnerable to the $25,200 technical price level, and if a more significant breakdown occurs, it could drop as far as $23,200.

Stockton also mentioned that while short-term oversold conditions are present, they may not be sufficient to counter the downside momentum. This weakened intermediate-term momentum could make it challenging for Bitcoin to achieve a substantial rebound.

Looking beyond Bitcoin, Ethereum (Ether), the second-largest cryptocurrency, saw a minor decline of less than 1% to $1,580. Meanwhile, smaller cryptocurrencies, often referred to as altcoins, had mixed performance, with Cardano showing a modest gain of less than 1% and Polygon experiencing a 2% decline. Dogecoin and Shiba Inu both had slight gains of less than 1%.