Where Is Bitcoin Headed This Week? How Will the FTX Vote and Inflation Data Impact the Crypto Market?
Since hitting a local bottom on August 5, several indicators suggest that institutions and large investors, often referred to as “whales,” have been accumulating crypto assets. Over the past week alone, the total cryptocurrency market capitalization has risen significantly from approximately $2.0 trillion to $2.2 trillion. This increase reflects a robust recovery in both Bitcoin (BTC) and various altcoins.
Bitcoin’s Market Structure: Short-Term and Long-Term Outlook
In the short term, Bitcoin price appears to be well-positioned for further upward movement. However, the mid-to-long-term outlook is more complex, influenced by upcoming events that could potentially steer the crypto markets in various directions.
Key Crypto Market Events This Week
Two major events this week could trigger heightened volatility in the cryptocurrency market:
- US Consumer Price Index (CPI) Release (Thursday): The CPI data will be crucial in shaping the short-term outlook for BTC. It will also influence the tone for the US Federal Reserve’s much-anticipated interest rate decision in September.
- FTX Repayment Process Voting (Friday): This event could have significant implications for the crypto markets, as creditors are expected to receive $12.7 billion.
The July inflation data is another critical macroeconomic event that will likely impact investor sentiment. While there’s a possibility that inflation might exceed expectations slightly, the general consensus is that it won’t lead to significant changes in the Fed’s September decision. Should this hold true, Bitcoin’s recovery rally is expected to continue. Conversely, lower-than-expected inflation could raise concerns about an economic slowdown, potentially leading to a correction in BTC prices.
Short-Term Bitcoin Price Prediction: A Bullish Week Ahead
Historical data from the past year indicates that Mondays, Wednesdays, Saturdays, and Sundays have generally shown positive returns. These days could be ideal for investors looking to take profits. On the other hand, Tuesdays have historically been the best days to buy dips in Bitcoin and altcoins. For the remainder of the week, the crypto market is expected to maintain its upward trend, with the exception of minor dips potentially occurring on Thursday and Friday. Given this historical context, the market is likely to remain bullish this week.
Three Long-Term Events That Could Shape the Crypto Market
While the US CPI and daily average returns can provide short-term insights, three significant events could have a lasting impact on crypto investment patterns in the coming months:
- FTX Creditors’ Cash Distribution: The $12 billion in cash distributed to FTX creditors could flow back into the crypto markets, enhancing the chances of sustaining the current bull run.
- US Presidential Elections: A victory for Donald Trump could lead to pro-crypto regulations, although Kamala Harris currently seems favored, which might present challenges to Bitcoin’s bull run.
- Federal Reserve’s September Rate Cut Decision: The anticipated rate cut in September could be a critical factor in either continuing or ending the current bull market.
“If Democrats soften their stance on crypto, the correlation between Trump victory odds and BTCUSD could break down,” noted Alex Thorn and Gabe Parker from Galaxy Digital in an email. They further explained that while the aforementioned events are somewhat bullish for crypto markets, macroeconomic concerns and government-held crypto movements are factors that could heighten the downside risks for Bitcoin and the broader crypto market.
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