Bear Market Ahead? 5 Essential Things to Know About Bitcoin This Week
The recent spike in Bitcoin volatility has raised fears of an impending bear market. A change in momentum is suggested by important indications such as diminishing trading volumes, deteriorating investor confidence, and tightening macroeconomic conditions. Bitcoin’s next steps might determine whether it enters a sustained decline, given the weight of impending decisions from the U.S. Federal Reserve and uncertainty surrounding the global economy. Short-term market observers are closely monitoring crucial support levels and possible catalysts for a rebound or additional slide. With all that said, here are 5 important things to know about Bitcoin this week that could provide a better prediction of whether the crypto will enter a bear market.
BTC Eyes $55K as September Decline Levels Out
Unlike the previous few weeks, Bitcoin avoided a big sell-off around the most recent weekly closing. Alternatively, data from TradingView and Cointelegraph Markets Pro indicates that $55,000 is the level that bulls are presently eyeing for a recapture.
If price can stay above $54.5k, I’m looking for a break above this green zone to see if Bitcoin can regain some upward momentum,
popular analyst Caleb Franzen
According to data from the monitoring tool CoinGlass, there is an addition of ask liquidity to the region around $55,500. CoinGlass expressed its optimism for continued upward movement in an X post. Despite this, BTC/USD is still down 7% in September, which is about average historically.
Critical Inflation Data: How CPI and PPI Reports Could Shape Fed’s Decision?
The August numbers for the Producer Price Index (PPI) and Consumer Price Index (CPI) will be released in the coming days, along with additional unemployment data. Markets are currently searching for any last-minute shocks that could alter bets on what the Fed will do next, in contrast to the latter, which witnessed the majority of risk-asset reactions last week.
This is the final week of inflation data before the long anticipated September Fed meeting,
According to the most recent projections from CME Group’s FedWatch Tool, markets continue to lean toward a 25 basis point interest rate reduction as opposed to a 50 basis point one. However, as the macro data comes in, this might not remain the same. Conversely, Kobeissi is among those who feel that an upside surprise from the Fed is improbable.
As we have been saying for weeks now, both 50 bps rate cuts and emergency rate cuts are NOT needed. While the labor market is cracking, the Fed needs to avoid moving too quickly again. The Fed has a bumpy road ahead.
The Kobeissi Letter
Crypto Fund Outflows Spike as Risk Appetite Vanishes in Q3
Institutional investment products in cryptocurrency have not fared well over the previous week as money has been leaving the market. Bank of America (BoA) reported the largest wave of cryptocurrency fund withdrawals since the bear market of 2022 in an exceptionally pessimistic assessment of the market. According to Kobeissi, this constitutes the second-largest outflow of its kind in the industry’s history, having totaled almost $600 million in just the last week.
Over the last several weeks, crypto funds have regularly seen outflows unlike in Q1 when weekly inflows were as much as $3.3 billion. Risk appetite in crypto seems to have disappeared despite expectations that the Fed will cut rates this month.
With daily net outflows over the past week, the situation for US spot Bitcoin ETFs is similarly dire. Two of the four trading days had net outflows above $200 million, according to data from UK-based investment firm Farside Investors.
Bittel: Bitcoin’s Current Price Structure Nearly Identical to 2019 Halving Cycle
There are more and more parallels between the current BTC price action and two block subsidy halvings in 2019 in the distance. After that, around the halfway point of the year, BTC/USD reached a long-term high, and it then stabilized until Q4 2020. The COVID-19 cross-market crash occurred during that period. The head of macro research at Global Macro Investor, Julien Bittel, believes that history is currently repeating itself.
This year’s Bitcoin price structure is starting to look eerily similar to 2019… Take a close look at the chart – it’s almost a perfect fractal of what we saw back then. Bitcoin has been stuck in a consolidation phase, and interestingly, just like in 2019, this consolidation has lasted exactly 175 days (so far). We’re now approaching that critical juncture where things could start moving in a big way.
Bittel
Analyst Caleb Franzen Highlights Bitcoin’s 4th Close Below Regression Channel
This week’s basic regression channel offers more short-term hope for Bitcoin bulls. As noted by well-known analyst Caleb Franzen, BTC/USD is presently testing support near the bottom edge of a channel it has followed since mid-March and its all-time highs of $73,800. Even the decline below $50,000 observed in early August did not undermine the channel’s crisp summary of the six months of consolidation that have been observed subsequently.
Bitcoin just had its 4th daily close below the regression channel,
Franzen
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