Bitcoin stuck at $20,000, pressured by Saylor, the Fed and Mt. Gox

Let's take this one step at a time. The trigger for the short-term bearish momentum for the quintessential digital currency and the asset class in general has been Federal Reserve (Fed) Chairman Jerome Powell's Jackson Hole speech a week ago. "The Fed remains hawkish despite a weakening economy. A wave of unemployment is coming. And lower inflation is nowhere in sight," commented Lark Davis, founder of Wealth Mastery.

Moreover, this is combined with some monumental challenges in other key economies: Europe's fears of a gas crisis that could have far-reaching effects, China's real estate problems that come at a terrible time and droughts in China and Europe that only worsen an already bad situation.

All this contributed to the dollar index reaching highs not seen since 2002. "It's not good at all," Davis stated. "Risk assets could face a very tough end to the year... unless they turn the money printers back on," he added. However, this is something that doesn't look close to happening.

On the other hand, Bitcoin is being weighed down by the liquidation of Bitcoin funds from the failed crypto-broker Mt. Gox. Those affected by the bankruptcy of this company endured years of litigation to recover their investments, which will begin to be cashed out either in Bitcoins or fiat currency. Market participants fear a wave of sales that will dynamite the price of the asset.

Finally, a new fear settled in around Michael Saylor and his company MicroStrategy, as he is being sued for tax fraud by the District of Columbia. He is accused of evading $25 million in taxes by living in the region for more than 10 years and not paying income tax.

"Since MicroStrategy is one of the largest holders of Bitcoin, crypto-investors started to panic about whether Saylor would have to liquidate some Bitcoins to pay the ensuing fines," noted Marcus Sotiriou, an analyst at GlobalBlock. "Whatever the outcome, I think investors are probably overreacting to this story and MicroStrategy won't end up having to trim its position in Bitcoin, but if it does this will lead to an attractive buying opportunity, in my opinion," he added.

Too many factors are piling up on the digital currency, so experts point to a move below the $20,000 mark as falling within the realm of possibility. Something that, Craig Erlam, an analyst at Oanda, believes "could be a major blow after the cryptocurrency staged an impressive rally over the past two months since mid-June."

"However, like other risk assets, its fortunes changed and the next few days could be key. A break below $20,000 could turn attention back to the $17,500 level, where it bottomed in early summer," the expert warned.