Bitcoin (BTC) starts the new week in a precarious zone, below $ 45,000 and some key moving averages. What awaits us?
After the strong liquidation of leveraged positions that led to a correction of around $ 42,800 last week, Bitcoin has written off most of its subsequent recovery.
This past weekend has brought little to support a change of direction, with downside volatility firmly in place. With BTC / USD down 13% in a week, Cointelegraph takes a look at five things that could help traders anticipate what the next move could be.
Stocks ready to rebound
Although selling pressure on the stock market impacted Bitcoin’s price action in the first half of September, stocks are expected to perform better this week, continuing the trend that has characterized markets since the Coronavirus crash in March 2020.
“This week, I expect stocks to rebound and provide some relief for Bitcoin,” supposes Charles Edwards, CEO of the investment manager Capriole.
Bitcoin’s overall relationship with macro trends has always been questioned over the past year. However, shocks to the system continue to affect BTC’s price action, as highlighted in early September at the Federal Reserve’s Jackson Hole virtual summit.
“The world still sees Bitcoin as an asset risk,” he said added Edwards including a comparison chart.
“Almost every Bitcoin correction in 2021 correlates with a correction in the S & P500 of -2% or more.”
On the other hand, strong stocks can serve to keep the strength of the US dollar in check, while also giving Bitcoin more relief.
Last week, the US dollar currency index (DXY) saw a rapid move towards 93, before pausing to consolidate its gains, a process currently in progress.
The spot price corrects further below the bullish parameters
This week’s BTC price directionality could represent the turning point for macro movements, according to forecasts.
After swinging over the weekend, the BTC / USD pair traded below $ 45,000 on Sunday.
Mentre in trader spot hedge their positions to the downside, there has probably never been a more evident disparity between on-chain parameters, adoption phenomena and price.
“Liquidity of stablecoins on the rise, bitcoins on exchanges hit a 3-year low, ordinary people wake up”, summarizes Lex Moskovski, CEO of Moskovski Capital.
“If the macro does not make a mistake, the next step is planned.”
Moskovski then added that macro markets had indeed started the week green and that stablecoins, not used as collateral for shorting, provided a clear bullish argument.
Stablecoins are at an all-time high and are not used as collateral for shorts.
Legacy finance opened higher.
What’s your motivation for selling, soldier?
Stablecoins are at all time high and not used as a collateral for shorts.
Legacy finance opened green.
What is your thesis for selling, soldier? pic.twitter.com/J2PMtsRVWn
– Lex Moskovski (@mskvsk) September 13, 2021
As reported by Cointelegraph, current estimates consider $ 43,000 and $ 38,000 as potential minimum prices, with a rebound from these levels still possible despite being well below important moving averages.
September has historically been a low-performing month for Bitcoin, and as such, price predictions favor the “real” upside starting from October onwards.
“Remember that most of the time Bitcoin has a negative month in September and a big price movement in the fourth quarter”, declares Monday Lark Davis on Twitter.
“BTC can still reach $ 100,000 by the end of the year.”
However, veteran trader Peter Brandt is sounding the alarm, at least for the moment.
“There is a name for this graphic figure. Anyone want to guess the name? “He tweeted including the daily chart showing what appears to be the breakdown of a bearish pennant structure.
“In step with 2017”
It’s not all over: when it comes to this halving cycle, Bitcoin is still “in step with 2017” this year in terms of rising prices.
The graph highlights the exodus of miners in May. As also happened between the increases of 2013 and 2017, Bitcoin recorded a negative movement in May, a trend currently underway.
As Cointelegraph reported, achieving a “double top” by the end of the year remains a possibility for analysts – just like in 2013 and 2017 – with a hypothetical fall in relation to the May plunge to $ 29,000.
New all-time high for the monthly illiquid offer
A feature that sets prices down last week from previous ones is investor behavior – they all continued to accumulate.
Unlike the panic seen during episodes such as March 2020, the past week saw the oversupply flow into the market from speculators eagerly bought by strong-handed investors.
According to analyst Willy Woo, every class of Bitcoin investor has increased their positions or remained neutral due to the recent turmoil.
“The whales have accumulated recently. Even the minnows. Holders of 10-1000 BTC remained mostly stationary “, reveals Sunday sharing data from on-chain analytics firm Glassnode.
“The reserves held by public players are shrinking (mainly on exchanges and ETFs, while companies accumulate).”
If the supply of Bitcoin is more in demand than ever, similar data reinforces the point. As noted by analyst William Clemente, last week had no impact on hodler patterns.
“93% of the Bitcoin supply hasn’t moved for at least a month. This is an all-time high. Another metric that shows how bullish the supply dynamics are, “he said commented, citing data from Glassnode.
Where once there was greed now there is fear …
Everything changes for the investor sentiment indicator, the Crypto Fear & Greed Index, which releases some special data on emotions in the market this week.
The fall to $ 42,800 took the indicator from “extreme greed” to “fear”, a sentiment zone that lasted until Sunday.
At the weekend, however, the index saw some new “greed”, despite the fact that price action actually eased further.
At the time of writing, Fear & Greed is at 44/100, in “fear” territory, with BTC / USD trading below $ 44,300.
The funding rates between exchanges, being slightly positive, however, do not rule out the possibility that a “short squeeze” could push prices up.
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