A return to $50K? 5 Things to know in Bitcoin this week
2024.08.19 05:19
Bitcoin (BTC) has been lacking momentum this week as BTC price predictions increasingly see the market heading lower.
After a promising weekend turned sour into the weekly close, BTC/USD Is offering little inspiration to traders already tired of rangebound moves.
The sentiment is sour, and while stocks have recovered from their flash crash at the start of August, crypto has yet to do likewise.
What could shake things up?
The United States Federal Reserve is in the spotlight this week as its annual Jackson Hole symposium comes around.
Chair Jerome Powell will address the current macroeconomic state of play as traders hope for a clear signal regarding interest rate cuts next month.
That could set up a volatile end to the week, but in the meantime, concerns are increasing that Bitcoin may lead crypto into another leg down.
$50,000 is in play, analysis warns, and while miners are staying cool, a sense of angst lingers over the market.
Cointelegraph takes a closer look at the key crypto talking points among traders as August grinds on with seemingly no new all-time highs in sight.
No talk of BTC price upside
Bitcoin gave up its weekend gains into the Aug. 18 weekly close — an all-too-familiar sequence of events for traders, who traditionally caution over “out of hours” market moves.
The Asia trading session nonetheless offered little hope to bulls, with BTC/USD trading at around $58,650 at the time of writing, per data from Cointelegraph Markets Pro and TradingView.
BTC/USD 1-hour chart. Source: TradingView
Devoid of a significant trend, BTC price action thus frustrated commentators.
“Boring weekend, price would probably chop for another week before we get any big moves,” popular trading account Logical TA wrote in part of its latest market coverage on X.
“$BTC has chopped for the last 160-170 days, this is more painful than a bear market.”
BTC/USDT 1-day chart. Source: Logical TA/X
Fellow trader Roman agreed while seeing the potential for a return to the area around $55,000.
“Slowly but surely making our way to 55k support. Will look for longs at that point. I’ve kept my thoughts the same for the last 2 weeks as the original uptrend was weak,” he told X followers.
Roman added that the Bollinger Bands volatility indicator needed to deliver an advance signal that the market was primed for a breakout in a given direction.
Analyzing both long and short-timeframe targets, meanwhile, trader CrypNuevo saw a “buying opportunity” closer to $50,000.
BTC/USDT 1-day chart. Source: CrypNuevo/X
“$53.6k and $51.5k are two potential levels that price will go to in order to fill those wicks in 1W & 1D time frames,” part of an X thread explained.
“So if you missed this move, you could likely be able to buy back at those levels again.”
CrypNuevo warned of a potential “fakeout” to the upside before price returns lower over the coming days.
“Most retail will be paying attention to and trading this channel; thus, we could see some manipulation from the Market Maker here,” he explained alongside an illustrative chart.
“We could see a fake-out above it at the start of the week to then drop to that new wick at $56k.”
BTC/USDT 4-hour chart. Source: CrypNuevo/X
Markets await Powell’s Jackson Hole appearance
This week, risk-asset traders are focused on the US Federal Reserve’s Jackson Hole symposium as markets demand cues on handling inflation.
The annual event will feature a speech from Fed Chair Jerome Powell on Aug. 23, and market observers will be keenly analyzing his language for confirmation of future policy easing.
Just weeks after the flash equities crash originating in Japan, markets are on edge — the Fed, they believe, will have no choice but to cut interest rates at its next meeting in September.
The latest data from CME Group’s FedWatch Tool maintains a 100% chance of a cut occurring in some form, with 71.5% odds of this coming in at 25 basis points.
Fed target rate probabilities. Source: CME Group
Commenting on the current landscape, trading resource The Kobeissi Letter acknowledged stocks’ impressive comeback since the Japan shock. As Cointelegraph reported, Japan’s Nikkei 225 required just days to erase what was its biggest two-day decline in history.
“The S&P 500 is now just 2% away from a new all time high,” it noted in an X thread.
“Markets have gone from entering correction territory to eying new all time highs in just days.”
S&P 500 1-day chart. Source: TradingView
Continuing, CrypNuevo forecast what he called a “very interesting week of year.”
“It’s an event attended by central bank leaders from around the world and it usually brings volatility,” he told X followers.
“This year, Powell will speak about the upcoming rate cuts. Hot take: Powell could say that ‘50bps cut in September is not on the table atm.’”
Bitcoin miners halt wallet outflows
Optimism surrounding Bitcoin miners continues this week as one on-chain metric shows BTC sales cooling.
In one of its Quicktake blog posts on Aug. 19, onchain analytics platform CryptoQuant showed the BTC reserves in known miner wallets beginning to stabilize.
“Miners have been selling their Bitcoins through over-the-counter transactions and exchanges until recently, but since the end of July, they have shown no signs of selling,” contributor Crypto Dan summarized.
Despite the recent significant price drawdown, miners have not yet been forced to reassess profitability despite their production cost per bitcoin being close to current spot price.
“Miners Reserves are now at January 2021 levels,” popular crypto commentator MartyParty added about the CryptoQuant data.
“The miner sell off appears complete.”
Bitcoin miner BTC reserves. Source: CryptoQuant
Miner reserves stood at 1.814 million BTC as of Aug. 18, down around 25,000 BTC since the start of the year.
Crypto Dan meanwhile was not wholly convinced that the landscape would remain stable going forward.
“Although one indicator shows only a positive aspect, considering that miners are whales and their movements always create large market fluctuations, I think it is worth watching the market for a while longer,” he concluded.
BTC market dominance falters
Bitcoin’s share of the total crypto market cap has seen its latest macro peak, traders say.
Having hit nearly 58% earlier this month, Bitcoin dominance is wavering — and ultimately, altcoins should benefit.
Bitcoin market cap dominance 1-day chart. Source: TradingView
“Bitcoin dominance on its final wave of completion,” popular trader Mikybull Crypto announced on X on Aug. 19, predicting a “big crash” in the index to ignite an altcoin renaissance in Q4.
An accompanying chart employed Elliott Wave theory to suggest a return back below the 50% mark for dominance, which currently stands at around 57%.
Bitcoin market cap dominance chart. Source: Mikybull Crypto/X
Michaël van de Poppe, founder and CEO of trading firm MNTrading, likewise predicted the “end of the bear market” for altcoins.
Bitcoin market cap dominance 2-week chart. Source: Michaël van de Poppe/X
“Real alt szn begins when BTC.D breaks beneath 50%,” fellow trader Kaleo continued last week in an X thread on the topic.
Kaleo concluded that he was “fairly confident” in the macro top being in for dominance.
“Bearish sentiment” with trend line out of reach
Bitcoin sentiment is firmly “bearish” thanks to price returning below a key long-term trend line, some of the latest analysis concludes.
Related: Is Bitcoin price going to crash again?
CryptoQuant contributor Axel Adler Jr. sees problems potentially arising due to BTC/USD giving up its 200-day simple moving average (SMA), currently at $62,750.
“BTC price is trading below the 200-day SMA, which formally indicates a bearish sentiment,” he wrote on X.
BTC/USD 1-day chart with 200SMA. Source: TradingView
Adler uploaded CryptoQuant data showing use of leverage on exchanges, this spiking to its highest levels since the Japan meltdown.
“Additionally, in recent days, increased leverage has been used on the top three exchanges,” he warned.
“The nearest support level is the 365-day SMA ($50K).”
Bitcoin adjusted estimated leverage ratio. Source: Axel Adler Jr./X
The latest data from the Crypto Fear & Greed Index meanwhile puts the average mood among crypto investors as just three points off “extreme fear,” measuring 28/100.
Crypto Fear & Greed Index (screenshot). Source: Alternative.me
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.
