Bitcoin (BTC) hugged $26,000 at the Sep. 24 Wall Street open as a weekly close “nosedive” brought lasting consequences.
Bitcoin must preserve support now, analysis says
Sideways weekend trading soon turned sour into the new week, and upset overnight meant that bulls were unable to recoup lost ground.
#Bitcoin Weekend price action wasn’t exciting until the later hours on Sunday as expected.
— Daan Crypto Trades (@DaanCrypto) September 25, 2023
“Bitcoin failed to break through local resistance in the form of a descending trend line, and it looks like a little bearish right shoulder may form,” analyst BaroVirtual, an ambassador for on-chain data platform Whalemap, summarized.
BaroVirtual uploaded a daily chart snapshot to X, showing a potential head and shoulders formation about to conclude.
“If true, BTC risks falling into the $22,000-$20,000 range,” it added.
That perspective chimed with others already expecting a return toward the $20,000 mark — something absent from the BTC price charts for six months.
Popular trader and analyst Rekt Capital, who previously envisaged the possible reappearance of the low $20,000s as part of a breakdown from a double top structure, now placed emphasis on holding current levels as support.
“Bitcoin could downside wick into the ~$25000-$26000 area on this current move down,” he wrote in part of fresh X analysis on the day.
“But if ~$26000 begins to act as resistance then that could be a bearish contributing sign that the ~$25000-$26000 area is weakening as support. If BTC turns the ~$25000-$26000 area into new resistance, price would collapse somewhere into the ~$22000-$24000 region to find a Local Bottom ‘C.’”
An accompanying chart laid out the key levels.
DXY surges to new 2023 highs
Macro markets meanwhile opened to another potential headwind for Bitcoin and crypto — an unrelentingly strong U.S. dollar.
The U.S. dollar index (DXY) continued its march higher, hitting 106.1 — its highest since November 2022.
Since hitting 15-month lows in July, DXY has climbed 6.5%, displaying strength which historically has hampered risk asset and crypto market performance.
Painful grind lower on risk assets as yields and DXY grind higher
Going to let this trading session develop more https://t.co/C67I5tJHRH
— Skew Δ (@52kskew) September 25, 2023
“DXY rocketing higher – to the detriment of BTC Crypto and other risk assets,” Matthew Dixon, CEO of crypto rating platform Evai, wrote in part of a reaction.
Dixon had previously eyed a potential cooling off in DXY strength, giving Bitcoin and altcoins room for a relief bounce.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.