FX.co ★ Bitcoin recovers to $100,000

Yesterday, pressure on Bitcoin increased once again, leading to a decline towards the $100,000 mark; however, the level was not tested. It is becoming evident that the number of buyers, who have been trying to support the market during this downturn, is insufficient to reverse the active selling that has persisted throughout the week.

Yesterday, Galaxy CEO Mike Novogratz stated that the cryptocurrency market remains sluggish, and many long-term investors are reallocating their assets and diversifying their portfolios after an extended bullish rally. He believes that while this is beneficial for the market in the long term, it may exert pressure on market quotes in the short term. He added that the market has not reached its cyclical peak yet, and a potentially more dovish Federal Reserve policy could catalyze a new rally by the end of the year.

Novogratz's statement reflects the complex dynamics currently observed in the cryptocurrency market. Fatigue accumulated after a prolonged period of growth is prompting investors to reassess their strategies and seek more reliable havens for their capital. This process of asset redistribution, while necessary for market stabilization, carries the risk of short-term pressure on cryptocurrency prices.

Moreover, the diversification of portfolios undertaken by many long-term investors indicates a desire to reduce risks and provide stability in uncertain conditions. Investors accustomed to rapid cryptocurrency growth are now exhibiting greater caution, seeking assets with lower volatility.

Despite the current situation, Novogratz remains optimistic about the long-term prospects of the market. He believes that the peak of the cycle has not yet been reached, and potential monetary easing by the Federal Reserve could ignite a new rally. Lower interest rates and increased market liquidity could rekindle interest in riskier assets, including cryptocurrencies.

However, it is important to note that the impact of Fed policy on the cryptocurrency market is a complex and multifaceted issue. Beyond directly influencing liquidity, Fed decisions also affect investor sentiment and their willingness to take on risk. Therefore, it's crucial to closely monitor the actions of the central bank and assess their potential impact on the cryptocurrency market.

Trading recommendations

From a technical viewpoint for Bitcoin, buyers are currently aiming for a return to the $102,400 level, which opens a direct path to $105,300, and from there, it's just a short distance to the $108,800 level. The most distant target will be the high around $111,300; surpassing this level would indicate attempts to return the market to bullish territory. In case of a decline, I expect buyers at the $99,400 level. A return of the trading instrument below this area could quickly push BTC down to around $95,800, with the further target being the $91,300 region.

For Ethereum's technical outlook, a solid consolidation above the $3,471 level opens a direct route to $3,664. The most distant target will be the high around $3,818; exceeding this level would indicate a strengthening bullish market and increased buyer interest. Should Ethereum decline, I anticipate buyers at the $3,291 level. A return of the trading instrument below this area could swiftly drop ETH to around $3,139, with the further target being the $2,950 region.

Chart indicators

• Red indicators represent support and resistance levels, where a slowdown or active price increase is expected.
• Green represents the 50-day moving average.
• Blue indicates the 100-day moving average.
• Light green signifies the 200-day moving average.

Crossovers or tests of the moving averages usually halt or set the market's momentum.