The price of Bitcoin, the top cryptocurrency, is expected to retrace to $18,300, according to Katie Stockton, founder and managing partner at Fairlead Strategies.
Stockton told Barron's that the world's largest coin had dropped below its 50-day moving average, which could be a harbinger of another large downside move.
The analyst now sees a higher risk of a long-term downtrend since the cryptocurrency has lost momentum.
The flagship cryptocurrency is currently trading at $21,492. It is up a modest 0.46% over the last 24 hours.
On Aug. 20, Bitcoin plunged to $20,769, the lowest level since July 26.
Stockton believes that the price of the largest cryptocurrency will stabilize in the near term. However, after a short-term relief rally, it will likely fall to the low $18,000 level, according to Stockton. The cryptocurrency is now experiencing waning momentum.
Risk assets, including Bitcoin, are likely to experience more volatility ahead of U.S. Federal Reserve Chairman Jerome Powell's speech at a Friday symposium in Jackson Hole, Wyoming.
The stock market was battered on Monday due to growing fears of another big rate hike in September.
As reported by U.Today, the central bank announced 75-basis-point rate hikes in June and July.
The cryptocurrency market has been severely affected by unfavorable macro conditions this year, with Bitcoin currently trading nearly 69% below its record price.
Vladislav Sopov