September ‘crash’ to $22K? — 5 things to know in Bitcoin this week


Bitcoin (BTC) begins a brand new week combating $26,000 as August turns into its worst month of 2023.

BTC worth power stays doubtful after a snap crash 10 days in the past, with bulls unable to wrestle again management of the market to present a reduction bounce.

The outlook is equally unsure, with September historically a poorly performing month for Bitcoin, and with the August month-to-month shut simply days away, might one other draw back shock lie in retailer?

Macro triggers are once more taking a again seat this week, with Personal Consumption Expenditures (PCE) Index knowledge the spotlight in what’s in any other case a cool week for crypto contagion.

That mentioned, merchants and analysts are on their toes, and with no trace of a rebound in sight, many are nonetheless braced for worse to come.

Cointelegraph takes a have a look at the principle BTC worth efficiency speaking factors for the week forward.

BTC worth sags with month-to-month shut in sight

There are not any prizes for guessing how Bitcoin ended its newest weekly candle, particularly with prior information of earlier closes.

Despite holding $26,000 into the shut, BTC/USD instantly went downhill after that, wicking to $25,880 earlier than consolidating barely greater, knowledge from Cointelegraph Markets Pro and TradingView exhibits.

BTC/USD 1-hour chart. Source: TradingView

That marked multiday lows, a part of what widespread dealer Skew forecasted may very well be strain from shorters into the brand new week.

“Shorts continue to stack into the weekend, expecting some kind of move around US Futures open and into Monday EU session,” a part of X (previously Twitter) evaluation read.

Skew moreover described weekend BTC conduct as “max pain price action.”

The month-to-month shut was a key matter for market members, with volatility on the playing cards after August produced 11% losses.

Keith Alan, co-founder of monitoring useful resource Material Indicators, predicted a visit to multimonth lows.

“Whales aren’t buying yet, and neither am I,” he commented alongside a chart of the Binance BTC/USD order ebook.

“Expecting volatility to continue through the monthly candle close. Patiently waiting to test the local low.”

In addition to low whale order quantity, the accompanying order ebook chart confirmed a scarcity of bid liquidity general, with $25,500 gaining solely modest curiosity.

BTC/USD order ebook knowledge for Binance. Source: Keith Alan/X

“I am looking for a trigger to enter where we drop to $25,000 lows, reclaim and pump,” widespread dealer Crypto Tony agreed.

“Or if we flip $26,700 into support. No entry before that on #Bitcoin as we are just mid range, so no safe entry just yet.”

BTC/USD annotated chart. Source: Crypto Tony/X

Beyond the draw back, shifting averages that beforehand acted as help earlier than the crash might now have the alternative impact, widespread dealer and analyst Rekt Capital warned.

“The BTC bullish momentum moving averages may act as resistance,” he summarized alongside the weekly chart.

BTC/USD annotated chart. Source: Rekt Capital/X

Further analysis hoped for a decrease low building to seem on weekly timeframes in what may very well be a part of a “subtle rising wedge.”

BTC/USD annotated chart. Source: Rekt Capital/X

August dangers being worst in eight years

It isn’t any secret that Bitcoin has underperformed this month — even by August requirements, which have hardly ever given bulls something to have fun.

BTC/USD is down 11% this month, and with the weekly shut across the nook, anticipation is constructing amongst market observers.

A have a look at comparative knowledge from monitoring useful resource CoinGlass reveals that August 2023 is already vying with final 12 months to turn out to be Bitcoin’s worst August since 2015. BTC worth shed 13.9% in August 2022, a transfer which marked the start of half a 12 months of ache.

BTC/USD month-to-month returns (screenshot). Source: CoinGlass

However, some consider that September might simply find yourself nearly as dangerous based mostly on historic precedent.

“Could Bitcoin Crash to $22,000 In September?” Rekt Capital queried final week in a part of an X submit.

“To answer this question, we need to first focus on August. What was the worst BTC August drawdown in history? -17% in 2014 and -18% in 2015. Currently in 2023, $BTC is now down -16%. If BTC were to drop -18% this August, BTC would drop to ~$24700. But that might not be the end of the retrace.”

Continuing, Rekt Capital famous that September normally provides a “single-digit drawdown.” Against the backdrop of its current double prime on weekly timeframes, a $22,000 goal strains up.

“So if BTC retraces, say, an additional -10% in September… That would mean price would drop to ~$22200,” he concluded.

“Then that would approximately match the Measured Move target for the Double Top breakdown of ~$22000.”

BTC/USD annotated chart. Source: Rekt Capital/X

Bitcoin’s “longest bear market in history”

Analyzing year-on-year (YoY) share returns for BTC/USD, in the meantime, the true extent of the current bear market turns into clear.

Michaël van de Poppe, founder and CEO of buying and selling agency Eight, concluded that it has, in truth, been Bitcoin’s “longest bear market in history.”

“The current bear market is relatively comparable to what we’ve witnessed in 2015. A period of sideways action, where the faith in crypto is slowly getting lost too, despite the fact of solid fundamental growth,” he wrote in current ideas on the crypto market.

“Right now, price of Bitcoin is nowhere near the valuation of the peak in November ’21. It’s down more than 50% and in a bear market of 490 days.”

An accompanying chart in contrast the present 490-day detrimental YoY returns to earlier intervals, with 2015 lasting 386 days.

Van de Poppe added that even optimistic information occasions, akin to the longer term green-lighting of the United States’ first Bitcoin spot worth exchange-traded fund (ETF), had not but entered market consciousness.

“The thing is, during the current period, these events are not being reflected in price at all,” he wrote.

“They lag behind because the market is caught in the ‘bear market modus‘, as the past 2 years price has been falling.”

BTC/USD YoY performance annotated chart. Source: Michaël van de Poppe/X

PCE data follows muted crypto Jackson Hole reaction

Bitcoin and altcoins have displayed precious little regard for macroeconomic developments in recent weeks.

Even Federal Reserve interest rate changes and data releases such as the Consumer Price Index (CPI) have had a barely perceptible impact on markets.

Last week’s feedback from Fed Chair Jerome Powell on the annual Jackson Hole Economic Symposium continued the pattern, at the same time as CME Group’s FedWatch Tool showed bets of a pause in fee hikes starting subsequent month at above 80%.

Fed goal fee chances chart. Source: CME Group

This week, regardless of containing the Fed’s most well-liked inflation gauge in the type of PCE, might properly find yourself no completely different.

PCE knowledge is due on Aug. 31, hours earlier than the Bitcoin month-to-month shut, with Sep. 1 providing nonfarm payrolls and unemployment knowledge.

For macro markets, nonetheless, monetary commentary useful resource The Kobeissi Letter promised an “action packed week.”

“Huge week for ALL things related to economic data, volatility is back,” it summarized in a part of its newest X evaluation.

Record hash fee displays “miner bull run”

Could Bitcoin miners already be offering a silver lining for bulls into the top of the 12 months?

Related: Bitcoin velocity hits lows last seen before Q4 2020 BTC price breakout

As Cointelegraph reported, one principle expects that This fall will see (*5*) in preparation for the April 2024 block subsidy halving, which can lower their reward per mined block by 50%.

They ought to be a part of “smart money” in doing so, making a buzz of its personal across the halving narrative, even when the broader market solely tends to react to emission adjustments post-factum.

Continuing the controversy, James Straten, analysis and knowledge analyst at crypto insights agency CryptoSlate, famous that Bitcoin hash fee is already headed into uncharted territory.

“The Bitcoin hash rate just hit 400 th/s for the first time ever. It is mind-blowing, considering the energy issues in Texas and the cost of electricity surging worldwide,” he told X subscribers.

“This is the miner bull run leading up to the halving next year. Similar explosive hash rate growth that led up to the 2020 halving.”

Bitcoin hash fee annotated chart. Source: James Straten/X

Hash fee is an estimation of the processing energy devoted to mining, and whereas inconceivable to measure precisely, figures from on-chain analytics agency Glassnode present not solely new all-time highs however a spate of upward changes contrasting with flat or downward-trending BTC worth efficiency.

Last week, Bitcoin additionally noticed certainly one of its largest upward difficulty adjustments of 2023, taking the on-chain elementary yardstick to all-time highs of its personal.

This article doesn’t comprise funding recommendation or suggestions. Every funding and buying and selling transfer includes threat, and readers ought to conduct their very own analysis when making a call.