Bitcoin, which has been hovering between $20,130 and $20,429 since falling from around $30,000 to around $20,000 early this month, was down 5.13% at $20,029.5 per coin as of press time. Bitcoin's inability to gain momentum has heightened analysts' fears of further declines in the cryptocurrency.
MarkNewton, technical strategist at Fundstrat Global, said on Tuesday: "the short-term technicals suggest an above-average probability of an eventual decline before the bottom. The initial warning should have occurred at a daily close below $20,491, while below $19,744 means a pullback and a retest at $17,592. From a technical point of view, there is not much room below $17,592 until $12,500 to $13,000, and I expect this should be the perfect place for medium-term buyers to add long positions."
Bitcoin is known to have been falling along with riskier assets in recent months, so a slide on a day when tech stocks were down was expected. The cryptocurrency market has also been hit by the collapse of the Terra/Luna ecosystem, problems at hedge fund ThreeArrowsCapital, freezing withdrawals from outfits like Celsius, and layoffs announced by Crypto.com, Coinbase(coin.us), and BlockFi.
CraigErlam, senior market analyst at forex firm Oanda, said: "the crypto industry should be relieved that cryptocurrency prices have stabilized, given the spate of negative news over the past few months. "I fear there will be more bad news in the coming weeks and bitcoin may not be able to gain momentum above $20,000."
In addition, Fundstrat said a further drop in bitcoin prices could create buying opportunities. "Expect to buy at lower levels in two to three weeks, and any test or brief break below the June lows is an opportunity," said Strategist David Newton.