Bitcoin (BTC) is still struggling with $26,000 in the new week as August turns out to be the worst month of 2023.
The strength of bitcoin’s price remains in doubt after the plunge ten days ago, with bulls unable to regain control of the market to provide a relief rally.
The outlook looks equally uncertain – September is traditionally a poor month for Bitcoin, and with August’s monthly close just a few days away, could there be another downside surprise?
Macro factors once again took a back seat this week, with personal consumption expenditures (PCE) index data a bright spot in a cool week for the cryptocurrency spread.
Still, traders and analysts remain vigilant — with no rebound in sight, many are bracing for worse.
Cointelegraph explores the main topics for BTC price performance in the week ahead.
BTC price falls, monthly close looms
There are no prizes for guessing how Bitcoin will end its latest weekly candle — especially with prior knowledge of previous closes.
While BTC/USD held at $26,000 by the close, it fell immediately thereafter, rising to $25,880 before edging higher, according to data from Cointelegraph Markets Pro and TradingView.
That marked a multi-day low, and popular trader Skew predicted it could be part of a new week of bearish pressure.
Part of X analysis: “Shorts continue to pile up into the weekend, expect some action at the open of US futures and Monday’s EU session” read.
Another tilt describe BTC’s behavior over the weekend has been dubbed “maximum pain price action.”
The monthly close is a key topic for market participants, with volatility likely after an 11 percent loss in August.
Keith Alan, co-founder of monitoring resource Material Indicators, predicts oil prices will fall to multi-month lows.
“Whales haven’t bought yet, and neither have I,” he said. commented Next to it is the Binance BTC/USD order book chart.
“Expect volatility to continue until monthly candle close. Be patient for a test of local lows.”
In addition to the low whale order volume, the accompanying order book chart shows a general lack of bidding liquidity, with $25,500 receiving only modest interest.
“I’m looking for a trigger point to get into where we hit the $25,000 lows, get back up and go up,” said popular trader Crypto Tony agree.
“Or if we turn $26,700 into support. No entry into #Bitcoin before then, no safe entry yet as we are only mid-range.”
Popular trader and analyst Rekt Capital warned that, in addition to the downside, the moving averages that previously served as support before the crash may now have the opposite effect.
“Bitcoin’s bullish momentum moving average could act as resistance,” he said Summarize Along with the weekly chart.
deeper analysis Look for a lower low structure on the weekly time frame, which could be part of a ‘subtle rising wedge’.
August could be worst in eight years
Bitcoin has notoriously had a rough month — and that rarely gave the bulls anything to celebrate, even by August standards.
BTC/USD is down 11% this month and expectations are building up among market watchers as the weekly close approaches.
Comparative data from monitoring resource CoinGlass shows that August 2023 is already on a par with last year as Bitcoin’s worst August since 2015. In August 2022, the price of Bitcoin fell by 13.9%, a move that marked the beginning of a painful half year.
Looking ahead, however, some believe September is likely to be just as bad, based on historical precedent.
“Will Bitcoin Drop to $22,000 in September?” Recter Capital ask In part of X’s post last week.
“To answer this question, we first need to focus on August. What is the worst decline in the history of Bitcoin in August? -17% in 2014, -18% in 2015. Now through 2023, BTC price has dropped- 16%. If BTC falls -18% this August, BTC will fall to about $24,700. But this may not be the end of the correction.”
Rekt Capital went on to note that September typically sees “single-digit retracements.” The $22,000 target is on the rise against the backdrop of a double top on the near-term weekly time frame.
“So if BTC were to retrace another -10% in September… that would mean a drop to ~$22,200,” he concluded.
“That would then be roughly in line with the measured moving target of the double top breakdown around $22,000.”
Bitcoin’s “Longest Bear Market Ever”
Meanwhile, analyzing BTC/USD year-over-year returns, the true extent of the recent bear market becomes clear.
Michaël van de Poppe, founder and CEO of trading firm 8, concluded that this is in fact Bitcoin’s “longest bear market in history.”
“The current bear market is comparable to what we witnessed in 2015. It’s a period of sideways movement where confidence in cryptocurrencies is slowly eroding despite solid fundamental growth,” he said. wrote Recent thoughts on the cryptocurrency market.
“Currently, the price of Bitcoin is nowhere near its peak valuation in November 21. It has fallen by more than 50% and is in a 490-day bear market.”
The accompanying chart compares the current 490 days of negative year-over-year returns to previous periods, of which 2015 lasted 386 days.
Even positive news events, such as the future approval of the first U.S. bitcoin spot price exchange-traded fund (ETF), have yet to enter market consciousness, Van de Poppe added.
“The problem is that, in the current period, these events are simply not priced in,” he wrote.
“They’re lagging behind because the market is stuck in a ‘bear market mode’ where prices have been falling for the past two years.”
PCE Data Follows Crypto’s Quiet Jackson Hole Reaction
Bitcoin and altcoins have shown little concern for macroeconomic developments in recent weeks.
Even data releases such as the Federal Reserve’s interest rate changes and the Consumer Price Index (CPI) had an imperceptible impact on the market.
Last week, comments from Chairman Jerome Powell at the annual Jackson Hole economic symposium continued the trend, even as CME Group’s FedWatch tool showed expectations for a pause above 80% in rate hikes starting next month.
This week, despite the Fed’s preferred inflation measure being personal consumption expenditures (PCE), the outcome will likely not be any different.
PCE will be released on August 31st, hours before Bitcoin’s monthly close, with non-farm payrolls and unemployment figures on September 1st.
It’s a big week for all things economic data, and volatility is back.
Employment, inflation, housing data, etc.
We’ll be posting this week’s deals soon.
In 2022, our call rate will reach 86%.
Subscribe to access our analytics and see what we’re trading: https://t.co/SJRZ4FrfLE
— KobeissiLetter (@KobeissiLetter) August 27, 2023
For macro markets, however, financial commentary resource The Corbysy Letter promises an “action-packed week”.
“It’s been a big week for all things economic data-related, with volatility returning,” it concluded in its latest X analysis.
Record Hashrate Reflects ‘Miner Bull Market’
Have Bitcoin Miners Offered a Silver Lining for Year-End Bulls?
Related: Bitcoin Velocity Hits Lowest Before BTC Price Breakout in Q4 2020
As reported by Cointelegraph, one theory predicts that miners will increase their bitcoin bids in the fourth quarter in preparation for the block subsidy halving in April 2024, which will reduce the reward for each mined block by 50%.
They should join the ranks of “smart money” creating their own buzz around the halving story, even if the broader market tends to only react to changes in emissions after the fact.
James Straten, research and data analyst at cryptocurrency insights firm CryptoSlate, continued the argument, noting that Bitcoin hash rate has entered uncharted territory.
“Bitcoin hashrate hits 400th/s for the first time ever. It’s exciting considering Texas’ energy issues and skyrocketing electricity costs worldwide,” he said. Tell X-subscribers.
“This is the miner bull run that led to next year’s halving. Similar explosive hash rate growth led to the 2020 halving.”
Hash rate is an estimate of the processing power dedicated to mining, and while it can’t be measured exactly, data from on-chain analytics firm Glassnode not only shows a new all-time high, but a series of upwardly adjusted bits in stark contrast to a flat or declining trend. currency price performance.
Last week, Bitcoin also experienced one of the largest difficulty increases of 2023, pushing the on-chain fundamental standard to new all-time highs.
This article does not contain investment advice or advice. Every investment and transaction involves risk, and readers should do their own research when making a decision.