Bitcoin (BTC) drifted near $21,000 on August 22nd on Wall Street as it started the new week without a recovery.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Rising European commodity prices knock the euro
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD failed to regain ground after last week’s 11.6% loss.
The pair set new multi-week lows below $20,800 over the weekend, which subsequently led to a modest relief bounce to surround $21,200 at the time of writing.
Concern about European markets and the upcoming Jackson Hole symposium of the US Federal Reserve contributed to a pessimistic mood about risky assets. The S&P 500 lost 1.8% within two hours of the opening, while the Nasdaq Composite fell 2.2%.
In Europe, gas and electricity prices rose again on concerns that supplies from Russia could shrink stronger and sooner than expected.
As a result, the euro fell below par with the US dollar for the first time since July.
“The end of summer is seeing the euro come back under pressure, partly because the dollar is a buy-off and partly because the Damoclean sword hanging over the European economy is not going away,” Kit Juckes, foreign exchange strategist at Societe Generale, wrote in a newspaper. Quoted by Bloomberg note.
As Cointelegraph reported, the euro was already facing several headwinds, with inflation still rising in the eurozone in July unlike in the US.
Moving average below 200 week ‘bad for bulls’
Analyzing the situation, the analytics resource on the Material Indicators chain had a positive side for traders on shorter time frames.
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She noted that the weekend drop still saw the market remain at its lowest levels since July, which means that the 2022 “bear market rally,” which lifted BTC/USD above $25,000, could still make a comeback.
However, as long as Bitcoin trades below the critical 200-week moving average (WMA) near $23,000, the situation favors bears.
Another post showed data from the order book of major exchange Binance, with some of the larger whales attempting to clear a selling wall just above the spot price.
BTC/USD (Binance) order book chart. Source: Material Indicators / Twitter
Taking a similar long-term bullish view, trader and analyst Rekt Capital simultaneously argued that buying BTC below $35,000 is still a “bargain.”
The area around this price level represents an area with a major trading volume, which will be a major obstacle that should determine the direction of price movement upwards.
However, additional research from Rekt Capital predicts a lower macro cycle in the fourth quarter if BTC/USD will repeat the timing of the previous macro lows from 2015 and 2018.