Bitcoin dropped from $59,076 to $57,127 at the start of today’s Asian trading session. BTC finished the week on $57.565. It lost ground again, and was unable to achieve a positive reversal. Several factors influence the direction of the market.
#1: Macro Fears Of A Recession
A recession in the US is creating a palpable level of tension. financial markets. Bitcoin is a good example, as it has not experienced an economic decline since its launch.
The Federal Reserve is gearing up to hold its Federal Open Market Committee meeting (FOMC), September 17-18 2024. Discussions about monetary policy have intensified. Jerome Powell’s remarks at the FOMC meeting have cemented expectations of a rate reduction. Jackson Hole SymposiumThe CME FedWatch tool indicates that there is a consensus expectation for a rate change.
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A significant majority of 31% expects an aggressive reduction of 50 basis points. Tom Capital is a cryptocurrency analyst who believes that such a reduction would be a good thing. drastic cuts Bitcoin’s investment prospects are complicated by the fact that these fluctuations could also be seen as signs of a crisis in the economy, rather than just adjustments.
“50 bps cut by the FED is an emergency cut, there is simply no other way to look at it. If your current bullish thesis for crypto rallying is predicated on large rate cuts, you might want to reconsider,” Tom Capital noted X. Skew, another analyst (@52kskew) echoed this sentiment, highlighting the importance of the upcoming US Economic Data Releases, especially the BLS Jobs Report due on September 6th.
Tom Capital has been added to the list “Needs to be real shitty jobs data in lead up to NFP on Friday, then a shocker NFP itself to get 50 bps (which isn’t out of the question given unreliability of data). However, I reckon the sticker shock of a terrible NFP is a higher probability risk off move, starting in Nas.”
The Seasonality of Bitcoin
Rekt Capital (another crypto analyst) provided some insights on seasonal patterns of Bitcoin. Historical data Bitcoin’s performance in September since 2013 has been mixed, with losses and gains being offset in different years.
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“Is September really a down month for BTC? Since 2013, BTC saw monthly returns of +2.35%, +6.04%, and +3.91% across three Septembers. And across 6 Septembers, BTC saw negative monthly returns ranging between -1% to -7.5%, with only two instances of double-digit downside (i.e., -19.01% and -13.38%). Macro-wise, however, September is typically a month of consolidation,” Rekt Capital analyzed.
Bitcoin sentiment is low.
Ali Martinez has identified, through the analysis of exchange data on-chain, a steady decline in investor interests and network usage. “The Exchange Volume Momentum indicator shows a sustained drop in exchange-related on-chain activity, which usually points to lower investor interest in Bitcoin and decreased network usage,” Martinez statedIt is possible that Bitcoin’s price could be negatively affected by the fact that Bitcoin users are less enthusiastic about using it.
Martinez added, “Bitcoin miners sold 2,655 BTC over the weekend, worth around $154 million!”
Fourth: Trading conditions
Bitcoin’s technical outlook is also dim, since the cryptocurrency failed to close out its week with a positive result. “Bitcoin needs to Weekly Close above ~$58,450 to protect the Channel Bottom and secure it as support on this retest. Price is at this support right now. An ideal close would even be ~$59,000 to get BTC above the blue Higher Low dating back to early July,” remarked Rekt Capital.
BTC is currently trading for $58,036.
Chart by TradingView.com. Image from iStock.
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Source: www.newsbtc.com