A classic ‘Rektember?’ 5 Things to know in Bitcoin this week
2024.09.02 05:11
Bitcoin (BTC) starts September with a whimper, as both the monthly and weekly close spark the BTC price’s downside.
Trading near spot demand at $57,000, BTC/USD is decidedly lacking bullish sentiment as analysis shows low interest among traders.
Is the market in for another “Rektember?”
This month’s status as a “red” patch for Bitcoin returns is well established, but not every forecast prepares for the worst.
Related: Bitcoin price volatility expected at Fed September FOMC meeting — Here’s how to prepare
The mid-$60,000 range still has traction as a short-term BTC price target, and September also marks the deadline for Bitcoin’s post-halving “reaccumulation range” to complete.
Macro conditions are set to stay calm this week, and a lack of major US data releases leaves unemployment figures as the key topic to watch.
With Bitcoin in flux, Cointelegraph examines the major talking points among market participants as the new month begins.
BTC price courts August lows
Bitcoin failed to impress around the latest monthly close, and conditions have remained tenuous.
BTC/USD 1-hour chart. Source: TradingView
Data from Cointelegraph Markets Pro and TradingView shows that bulls have been powerless to overcome sell-side pressure, which popular trader Skew shows has characterized low-timeframe market conditions.
“For most of the past week there has been a clear spot buyer around $58K, which is important context on bounces,” he wrote in part of his latest X analysis.
“Currently price is around spot demand but will need to see confirmations of demand with taker and passive buyers.”
Bitcoin order book data. Source: Skew/X
Skew nonetheless highlighted a broad lack of interest in derivatives markets at current prices, suggesting that funding rates may thus stay “negative or low” for the time being.
“I do see overall the market is likely to favour shorts from here as a hedge with the past week of spot selling,” he continued.
“However practically no growth in market positioning since the sell off into $58K ~ this tells me people have stepped away from trading.”
Data from monitoring resource CoinGlass shows the bulk of bid support clustering around $56,750 at the time of writing on Sept. 2.
BTC/USD monthly returns (screenshot). Source: CoinGlass
Other traders saw the potential for a push into local lows before any relief for bulls, with estimates including $56,000 and $54,000.
“it’s more like they will push the price to 56k n sweep Tuesday’s low before moving to upward. Remember they may still want to scam hard by pushing the price to 49k (Monday august 5 low),” Madara forecast.
“If the bounce is going to happen after 56k then my expectation is 60.5k as first move then 65k.”
BTC/USDT 4-hour chart. Source: Madara/X
Fellow trader Captain Faibik suggested the relief bounce could even take the market as high as $68,000 this month.
Source: Captain Faibik
Labor Day week sees US jobs in the spotlight
With US markets closed for the Labor Day holiday on Sept. 2, traders will be waiting for the end of the week for any macro-related volatility to hit.
Ahead of the Federal Reserve’s meeting on interest rates on Sept. 18, macro data is of key importance as markets thrash out expectations.
The latest data from CME Group’s FedWatch Tool currently shows a minimal 0.25% rate cut as the meeting’s most likely outcome.
Fed target rate probabilities. Source: CME Group
This has flipped from expectations a month ago, when it was a 0.5% cut in the spotlight amid turmoil stemming from Japan.
This week, meanwhile, it is US unemployment numbers that will form the centerpiece in what should be an overall quiet start to the month.
“We expect elevated volatility and great trading conditions with focus on August jobs data,” trading resource The Kobeissi Letter told X followers.
Kobeissi revealed the extent of the stock market comeback since the early August lows, with the S&P 500 adding an average of $250 billion each trading day since.
“The S&P 500 has added its average ANNUAL return in 20 trading days,” part of another X thread noted.
As Cointelegraph reported, stocks and gold have outperformed crypto markets significantly in recent weeks, with Bitcoin continuing to languish despite at one point itself recovering by 40%.
All aboard for ”red” September?
BTC/USD ultimately came in 8.6% lower for the month of August, setting the stage for what could be a grim September.
The ninth month of the year tends to produce losses in and of itself, data from CoinGlass shows, with average downside of around 4.5%.
August, by contrast, tends to be a “green” month, leaving this year as a historically poor performer.
Despite this, it could all simply be a matter of timing — and history could still be on the side of the bulls.
In some of his latest market commentary, popular trader and analyst Rekt Capital suggested that BTC/USD is still working on its post-halving breakout, in line with previous halving years.
“History suggests that Bitcoin tends to breakout 150-160 days after the Halving,” he explained in an X post on Aug. 31.
“That would mean Bitcoin would breakout from its ReAccumulation Range in late September 2024.”
Rekt Capital acknowledged that even Bitcoin’s best-ever September produced gains of just 6%. October, however, could change the game, with average monthly returns of nearly 23%.
“I wouldn’t be surprised if Bitcoin consolidates just a little bit more beyond late September to achieve an October breakout,” he concluded.
“After all, October has always historically been a strong month.”
BTC/USD halving comparison chart. Source: Rekt Capital/X
Puell Multiple teases buying opportunity
The concept of Bitcoin being in a transitory phase in its bull market is also supported by the classic Puell Multiple metric.
The Multiple compares the value of all Bitcoin mined daily to their 365-day moving average to identify relative buy and sell zones.
As CryptoQuant defines it, Puell answers the question, “If all mined bitcoins were sold immediately in the market, how profitable mining pools are compared to last historical one year?”
Currently, Puell is neither calling a macro top nor bottom, while slowly heading toward its green long-term “buy” zone characterized by a reading of 0.5 or less.
As Cointelegraph reported, this could preclude a reliable market entry being not much lower than the current spot price.
“Analysis of the last decade’s trends reveals that when the index falls below the 0.6 threshold, it often represents an ideal opportunity for Dollar-Cost Averaging (DCA) strategies. Conversely, a breakout above the 0.8 level has historically been associated with bullish market behavior, frequently propelling the price towards new all-time highs (ATH),” contributor Grizzly wrote in one of CryptoQuant’s Quicktake blog posts at the weekend.
“At present, the Puell Multiple index is fluctuating between these two critical levels.”Bitcoin Puell Multiple chart (screenshot). Source: CryptoQuant
Deep learning model favors BTC price bounce
While September is traditionally a “red” month for BTC/USD, new analysis suggests that 2024 may end up as an exception.
In another of its Quicktake posts on Sept. 1, CryptoQuant used the WaveNet deep learning model to predict a “relative increase” in the BTC price.
In June, a similar experiment correctly guessed that the price would track sideways just below $60,000 in the coming month.
For contributing analyst CryptoOnchain, who compiled the latest data, these were “acceptable and close to reality forecasts.”
“For this purpose, all the data from 2012 to today have been used as features. The output of the wavenet model shows the probability of a relative increase in the price of Bitcoin in the next month,” he commented.
Related: Bitcoin is capped at $60K, but LTC, FET, MNT and AAVE show promise
An accompanying chart of the results shows price action skewed upward, with a 50% probability of price reaching up to just beyond $65,000 in September.
“The range of 0.5 shows the area where there is a 50% probability that the price of Bitcoin will be in that range and the range of 0.9 shows the area where there is a probability of 90% of the price of Bitcoin,” CryptoOnchain explained.
WaveNet BTC price prediction (screenshot). Source: CryptoQuant
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
