FX.co ★ Bitcoin investors in "buy the dip" mode

On September 19, bitcoin sank and entered the critical range of $18.2k-$18.5k. The reaction of bulls followed instantly. So, BTC remained in the important support zone. On September 21, the market is under full control of bears, and the digital gold risks breaking through the $19k barrier.

The "buy the dip" sentiment has increased in the crypto market in recent days, followed by an insignificant rise in trading activity in the Bitcoin network. In light of the current crypto market sentiment, it remains to be seen whether BTC will consolidate in the narrow range of $18.9k-$19.1k and leave the limits of the critical area.

Technical analysis of BTC/USD

This is unlikely to happen because bears are in control over the market with other factors signaling weaker BTC. Although the digital asset settled above the critical zone of $18,680-$18,950, the price is about to retest this range again.

After a bullish impulse, bears's control is felt across the crypto market. On the daily chart, the Relative Strength Index (RSI) and the Stochastic Oscillator have been moving down since September 12. The MACD is also moving down belwo zero, signaling a strong bearish bias.

Another warning signal comes from the monthly time frame of BTC. Trading volumes sank deeply. Trading activity is at its lowest since bitcoin traded for the first time. This reflects how serious and unique the current crisis actually is. In addition, the RSI dropped to its all-time low.

Technical analysis of SPX

The correlation between the US stock index and bitcoin has reached its maximum, which is typical for deep crisis situations. SPX is trying to consolidate around $3,850, but technical indicators show the continuation of the bear trend. The level of $3,700 is seen as support for the index. In this light, bitcoin is likely to trade accordingly.

Technical analysis of DXY

The US dollar index is again on the rise, weighing on high-risk assets that are in an inverse correlation with the indicator. DXY is testing resistance, with technical signals indicating a successful retest of the range. Therefore, neither BTC nor SPX are expected to rise.

Fundamental factors

BBG analysts forecast the Fed's benchmark rate to be lifted by another 2% to 4.5% on an anuall basis, which is seen as a negative factor by investors who immediately rushed to sell off high-risk assets.

Investing in the crypto industry keeps falling. JPMorgan experts reported that crypto products notched significant capital outflows. Last week, crypto funds saw an inflow of just $7 million. It seems that bitcoin is about to bottom below $17k.

Long-term investors still active

Although investing in the crypto market is decreasing, bitcoin is fundamentally still in demand. As the Glassnode data shows, the number of addresses holding different volumes of BTC coins is growing.

For example, the number of addresses with 0.01 BTC reached an all-time high of 10,725,606. Large investors and crypto whales are also actively buying bitcoin, while it trades at a reasonable price. MicroStrategy purchased 301 BTC for $6 million. While some investors are accumulating BTC, others are selling coins to get liquidity or limit losses.

Another sell-off could take place already today when the Federal Reserve discusses the current inflation situation at the meeting. Markets bet on a 75 basis point rate hike, but as inflation remains stubbornly high, the US central bank may raise the ket rate by 100 basis points.