Bitcoin price focus on $20,000, "but $18,500 and $17,500 are more important"

Bitcoin succumbs to downward pressure in recent days as 'bears' regained momentum after the digital currency failed to consolidate above $22,000. It left a session low below $20,000 on Monday, which it extends on Tuesday to its worst swing in the past week, despite the efforts of whales and shrimp to keep the price afloat.

"Bitcoin´s rally last week may have excited some, but I imagine most will have viewed it with a lot of doubt," commented Craig Erlam, analyst at Oanda. "Not only is the overall market environment not in its favor, even if the occasional bear market rally inspires some hope, but the cryptocurrency community isn't exactly enthusiastic either," he added.

"Perhaps it's accepted that the downturn will continue for some time and that we simply have to weather the storm. It's just a question of how treacherous it's going to be," the expert warned. "The focus is still on $20,000, but at this point, $18,500 and $17,500 are probably more important," he noted, as they are the lows of the recent selling spree and losing them would mean the community currency will head toward $13,000, in the first instance, although investors are betting on $10,000 as a downside target, according to a recent survey.

The tussle between bearish and bullish in whales and shrimp, the accounts with more than 1,000 and more than 1 Bitcoin, respectively, two powerful allies on the buy side. These two groups are HODLers - investors in Bitcoin as a long-term proposition who refuse to sell their holdings - and are determined to push the 'bears' back, despite their portfolios being in the red.

The shrimp are collectively adding to their balance at a rate of 60,460 Bitcoins a month, the most aggressive in history, according to an analysis by data firm Glassnode. Whales, those with more than 1,000 Bitcoin, were adding 140,000 coins a month, the highest pace since January 2021.

"The market is approaching a regime led by HODLers," Glassnode stated in a note, referring to the cohort whose name emerged years ago from a trader who misspelled "hold" in an online forum.

After Bitcoin's worst month in 11 years in June, the decline appears to have slowed, as transaction demand appears to be moving sideways, according to Glassnode, indicating a stagnation of new entrants and a likely holding of a base load of users, namely HODLers.

Bitcoin has been hovering between $19,000 and $21,000 over the past four weeks, less than a third of its peak of $69,000 in 2021.