The price of Bitcoin (BTC) remains below $22,000 as the ongoing impact of the August 19 sell-off at $25,200 continues to be felt throughout the market.
According to analysts from on-chain monitoring source Glassnode, BTC’s knock at the $25,000 level was followed by a “distribution” as profit-takers and short-term holders sold as price encountered trendline resistance following a 23-day consecutive uptrend that saw BTC. trading above the realized price ($21,700).
The firm also noted that the “total inflows and outflows across all exchanges” metric shows exchange flows at multi-year lows and back to “late 2020 levels,” reflecting a “general lack of interest speculative”.
Stocks and cryptos are clearly bearish until we hear the Fed outlook coming out of Jackson Hole this week/end. $BTC the price continues to fluctuate, but it seems a bit “soft”. pic.twitter.com/jpVjG2jslh
— Big Smokey (@big_smokey1) August 23, 2022
From a higher time frame perspective, Bitcoin’s current price action is simply a continuation of its nearly three-month low in the $18,500 to $22,000 range, but the real drag on sentiment is the ongoing concerns that relating to cryptography in the United States. and the global economy.
On August 25, the Jackson Hole Economic Symposium begins and from this, the public will learn more about the Federal Reserve’s outlook for the US economy, its plans for future interest rate increases, if the inflation target remains at 2 % and if the Fed thinks the US and the global economy are in recession. The anticipation for the symposium has left investors jittery, and those frayed nerves are visible in the S&P 500, DJI and crypto markets this week.
According to Serhii Zhdanov, CEO of cryptocurrency exchange EXMO:
“There appears to be no single driver for the recent decline. Global crises continue and it is not certain where the end is. Inflation is forcing people to get rid of their investments to get cash to cover their daily expenses. In many countries, the total amount of credit card debt is reaching new record levels. The latest data shows that Covid is not gone and geopolitical tension adds further fuel to the decline of global markets.”
The ether marches to the beat of its own drum
Ether (ETH), on the other hand, seems to be showing some positive promise from a technical analysis standpoint. Last week, the asset corrected along with BTC and took some hits related to centralization fears after the Office of Foreign Assets Control, or OFAC, sanctioned Tornado Cash and the crypto community feared the possible outcomes of the trial transition. of shares making the network (and its largest ETH shareholders) susceptible to censorship and regulation.
Overall, the bullish “consolidation” narrative remains in play, and the large cup and handle pattern seen on Ether’s daily frame, plus the bounce from the $1,500 level are enough to support traders’ dreams of an ETH rally in the $2,500 to $2,900 range.
Ether looks equally liquid on its ETH/BTC pair, which bounced off support at the 0.073 BTC range.
Data on the MVRV chain points to undervalued Bitcoin
As @big_smokey1 mentioned “stocks and crypto [are] clear risk” with the upcoming Jackson Hole and in terms of price action, this is likely to show up as continued resistance in Bitcoin’s long-term downtrend line until a catalyst sufficient to provoke a trend reversal emerges.
Connected: What Crashed the Crypto Relief Rally? Find out now in the Market Report
At the moment, Bitcoin’s short-term price outlook is less than optimistic, but Jarvis Labs resident analyst “JJ” pointed to a key on-chain metric that suggests BTC is trading in a generative buy zone.
According to JJ, Bitcoin’s MVRV (Market Capitalization vs. Realized Capitalization) indicator is printing a reading that is “extremely low.”
Does this mean investors should go out and put every last penny into BTC? Probably not, but as the MVRV chart above shows, dollar cost averaging in BTC when its on-chain and technical metrics reached extreme levels has proven to be a profitable strategy in the last three bull markets.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your research when making a decision.