Bitcoin retreats 7% after sharp rejection at $20K

The Bitcoin (BTC/USD) price retreated hastily from the $20k level as pressure across the asset class dismantled bullish plans on Tuesday.

Part of the Bitcoin news circle yesterday had been the sharp rise its price – indeed the bellwether crypto rose gallantly from lows of $18,600 to hit two week highs above $20,300.

BTC spiked as fiat struggled

Fiat currencies were struggling, including GBP that saw huge trading volumes. James Butterfill, Head of Research at CoinShares noted and shared the high BTC trading volume against the UK currency.

#Bitcoin volumes against #GBP were US$881m yesterday (US$70m average), when a FIAT currency is threatened, investors start to favour Bitcoin pic.twitter.com/Q3pXJTDHWZ

— James Butterfill (@jbutterfill) September 27, 2022

Michael Saylor, the founder and Executive Chairman of MicroStrategy also noted the ‘record’ spot volume for bitcoin on crypto exchange Binance.

Is this a record for #BTC spot volume on @binance? pic.twitter.com/jf8288uJet

— Michael Saylor (@saylor) September 27, 2022

However, trading volumes hitting a multi-month peak amid massive sell orders at the psychological level also meant one thing – the drop was coming. It happened, and it’s just as spectacular in terms of how fast it rose and then gave up the gains and with high sell volumes.

Data from market intelligence platform Santiment showed that bitcoin’s trading volume had risen to a three month high as the BTC price fell below $18,800.

📊 Trading volume has heated up for #crypto markets, and especially #Bitcoin. During the big leg down on Tuesday, $BTC peaked at its highest level of trading since June 14th. Volume has gradually risen all year since bottoming out in late January. https://t.co/jbT7GMDj3n pic.twitter.com/c0Bnm7Jl52

— Santiment (@santimentfeed) September 28, 2022

As previously reported, some analysts look at a worst case scenario for BTC being a retreat to the June 2022 troughs and possibly retest of areas as low as $12,000.

Bitcoin is currently hugging the $18,600 zone, down more than 7% in the past 24 hours.

The declines also happened as the S&P 500 shed early gains to hit near two-year lows amid continued market jitters over an overly aggressive US Federal Reserve.

The Fed’s more aggressive rates mean stocks and other risk assets continue to hover around levels likely to include further pain, with analysts pointing to 3,200 for the S&P 500. The index closed Tuesday’s session at 3,647.29.