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After experiencing a troubled trading day yesterday, Bitcoin has managed to recover slightly, currently trading around $19,958, just under the key psychological level of $20,000.
However, we are only 6 days into September, a month in particular Bitcoin has never favored as historically since 2013, the biggest cryptocurrency has declined on average by 6% in the month.
There are also other factors on the horizon which could make September more painful for BTC.
Many investors believe that the approaching Ethereum Merge could cause another crypto crash but I see the next action that the FED may take to be more threatening.
On the 21st of September the Board of Governors of the Federal Reserve will meet and will announce their interest rate decision. After an extremely hawkish speech made by FED Chair J Powell at Jackson Hole on the 26th August, the market is pricing in a 50% chance of a 75 bps rate hike. Such an aggressive move, could lead to further USD strength and more selling pressure on bitcoin as risk appetite dries up.
Before that we do have other key US data such as the US CPI due 13th September and today with the US ISM Services PMI which is expected to indicate a slow down in growth in the US economy.
Either way, it's not just that we are in September that bitcoin needs to be concerned with but this month could bring.
For now the largest cryptocurrency is holding steady and is trading above a key potential support of $19600, which if broken could lead the way to the $18,000 level. Key resistance as I see it remains at $20,355.
James Trescothick is Tixee's Global Market Analyst.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.