Bitcoin (BTC / USD) price fell on Monday as sentiment in the cryptocurrency industry deteriorated. It fell to $ 44,000, its lowest level since September 7th. It’s down more than 17% from its peak this month.
Bitcoin momentum is losing momentum
Bitcoin made a notable comeback between July and early this month. During that time, the price rose from under $ 30,000 to over $ 52,000. This rally was largely driven by strong buying as price struggled to break below key support at $ 29,500.
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The ongoing sell-off accelerated after El Salvador made Bitcoin legal tender last week. As a sign of confidence in the currency, the government decided to buy more than $ 20 million worth of bitcoin. It was the first country in the world to have Bitcoin in its treasury. The news was confirmed last week and investors were selling BTC.
The decline in Bitcoin price came at a time when the US dollar has remained relatively stable compared to other currencies. The dollar index, which measures the currency’s performance against other currencies, rose to $ 92.7, its highest level since Wednesday last week.
The strength of the US dollar is due to the latest inflation data slated for Tuesday. Consumer prices are expected to remain above the Fed’s 2% target. Therefore, the US dollar’s performance is likely to continue as investors eagerly await the Fed’s rate decision planned for the end of the month.
Meanwhile, on-chain data on Bitcoin isn’t all that encouraging. The numbers show that the number of Bitcoin addresses has started to decline, which is a sign that many traders have started to pull back. Likewise, the total number of fees paid on the network has decreased, which is a sign that activity has decreased.
Bitcoin price forecast
The daily chart shows that bitcoin price broke and retested the important resistance level at $ 41,115 in August. This was an important mark that he had struggled to move across several times before. After the surge, the coin hit a multi-month high of $ 52,000.
It has now reversed its trend and is now trading slightly below the 25- and 50-day exponential moving averages. It also formed a downward pattern. Hence, there is a likelihood that the coin will continue to decline as the bears target key support at $ 41,115. However, in the longer term, the price is likely to resume the uptrend.
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