Markets Report: Bitcoin Loses $12,000 as Analysts Warn of Fresh Dip Before Bulls Regain Control

Bitcoin has fallen back below $12,000 after a night of downward pressure cost bulls their latest major psychological price level.

As confirmed by price trackers including CoinMarketCap, a correction took hold during trading later on August 18, culminating in a dive to $11,620.

A subsequent bounce put BTC/USD closer to $11,900, with press-time levels circling $11,880.

The move extinguishes Bitcoin’s latest trip above $12,000, which remains a challenging price point to flip to reliable support. Several attempts to do so in recent weeks have all failed, with the latest nonetheless enduring considerably longer—days rather than hours.

Unfortunate timing may be to blame—Tuesday saw a sudden downturn for gold and the S&P 500, with analysts arguing that Bitcoin was simply swept along by the tide.

Despite the cryptocurrency’s correlation with gold decreasing in August, macro movements still exert clear influence on Bitcoin price activity.

For popular analyst Michaël van de Poppe, who was already skeptical about the nature of the $12,000 run, a further pullback is now all the more likely.

“Well, we did get the fake-out, didn’t we?” he told Twitter followers on Wednesday. 

“I thought the drop would be towards $11,500 but came close. The general scenario is that we’ll be ranging a bit here, before continuation of the downwards momentum.”

In an accompanying chart, Van de Poppe eyed a move closer to $11,000 by the end of the month, followed by a return to bullish behavior in September.

Eyes on gold as USD hemorrhages value

Fellow trader Josh Rager agreed that roaming in the $11,000 corridor would characterize BTC/USD in the short term.

Analyzing the 4-hour chart on Tuesday, he warned that a close below $11,900 “wouldn’t be ideal,” with the subsequent lower close thus cementing what he described as “re-acceptance” of lower levels.

Another move in gold could meanwhile break the cycle once again. As gold bug and infamous Bitcoin critic Peter Schiff noted, continued weakness in the U.S. dollar may yet set the stage for fresh upside.

The USD currency index, created using a basket of major U.S. trading partners’ currencies, hit its lowest levels since 2018 this week.

“The U.S. dollar’s slow bleed continues, with the Dollar Index breaking below 92.50 for the 1st time since May 2018. Once the Jan. low is breached (4 handles lower), a larger wound will open and the blood loss will accelerate,” he tweeted. 

“Once it breaks the 2008 low the dollar will bleed out.”

A trip to the levels of 12 years ago would further fuel comparisons to the Global Financial Crisis which spawned Bitcoin as an antidote to inflationary central banking.

Continuing, Schiff warned that the U.S. was about to fall off the edge of a cliff in terms of financial instability.

“America is headed for a crisis the likes of which the world has never seen. Currencies have been destroyed before and people have been (impoverished), but never on so great a scale,” he wrote on Tuesday. 

In classic style, he carefully avoided plugging Bitcoin as a safe haven:

“The loss of wealth will be unprecedented. To avoid this loss personally, buy #gold and foreign assets.”