Will Bitcoin End Its Price Slump Before September? Five Key Things to Watch This WeekBitcoin is poised for a critical monthly candle close this week, with BTC price action battling back against sellers in a bid to reverse the August 8th crash. As the end of August approaches, Bitcoin has embarked on a resurgence, with BTC price targets set at $65,000
Will Bitcoin End Its Price Slump Before September? Five Key Things to Watch This Week
Bitcoin is poised for a critical monthly candle close this week, with BTC price action battling back against sellers in a bid to reverse the August 8th crash. As the end of August approaches, Bitcoin has embarked on a resurgence, with BTC price targets set at $65,000. The largest crypto has displayed remarkable strength over the past week, and traders are hoping the good times will continue.
After a quiet weekend, Bitcoin consolidated its gains, now up an impressive 40% from the months low of $45,500. The upcoming monthly candle close is therefore expected to provide an interesting trading environment, as the market awaits a breakout from nearly half a year of consolidation. Can Bitcoin finally challenge its all-time high again?
BTC/USD has almost returned to its starting position this month, but there are still many volatile factors to watch. Macroeconomic data will be released in large volumes this weekend, presenting a fresh test for a Bitcoin short-term holder group that remains increasingly cautious. Meanwhile, fundamentals look healthy, with mining difficulty expected to modestly increase in the coming days. Market sentiment has returned to neutral territory, with retail crypto investors quickly shedding their fear.
Cointelegraph takes a closer look at where Bitcoin stands this crucial week, just two weeks after calls for the crypto to enter a new bear market.
Bitcoin Monthly Close in Focus
After a dismal start to August, Bitcoin is staging a strong comeback, but traders attention is now fixed on the monthly candle close.
Such events are in themselves volatile triggers, although BTC price action still faces several challenges despite rising 40% from the months low.
Bitcoin is fighting its way back almost flat for August, popular trader DaanCryptoTrades summarized on X, attaching data from monitoring resource CoinGlass.
However, order book liquidity insights show strong resistance remaining above, with a wall of sell orders separating the spot BTC price from the all-time high.
Now lets see if theres enough momentum to really push the price higher, DaanCryptoTrades continued. In another post, he acknowledged the unprecedented length of the BTC price consolidation period since the March mid-year high.
Bitcoin is approaching a 6-month consolidation at the last cycle high, he told followers. Its the longest it has taken to break the previous all-time high. Also, it is the fastest it has taken for price to make a new all-time high within a cycle (before the halving). It all balances out.
Another trader, CryptoTony, also called for solid support to maintain the further recovery action.
CointelegraphMarketsPro and TradingView data shows that BTC/USD is trading around $63,700 at the time of writing, with prices remaining stable over the weekend.
PCE Week is Here, With the Countdown to Fed Rate Cuts
As markets become more confident about easing monetary policy, one of the highlights of the macroeconomic data this week is the Feds preferred inflation gauge. The Personal Consumption Expenditures (PCE) price index for July will be released on August 30, the day after the release of the second-quarter US GDP figures. These two data points will follow a key earnings report from NVidia a barometer of the health of the tech sector this year.
As such, trading resource TheKobeissiLetter told followers on X to get ready for a wild week.
NVIDIA Earnings Releases and PCE Inflation Data Both This Week Setting Up Trade, it wrote.
By the time PCE is released, the market is already 100% expecting a rate cut in mid-September, with increasing confidence that the cut will be greater than the minimum 0.25%. The latest data from CME Groups FedWatch tool shows a 61.5% chance of a 25-basis-point cut and a 38.5% chance of a 50-basis-point cut.
September rate cut is priced in, but there is no indication on the magnitude of the cut, hence the August employment report will be critical, trading firm QCPCapital wrote in a weekend update to its Telegram channel subscribers. A 25-basis-points cut could be positive for markets, while a 50-basis-point cut could signal aggressive action from the Fed to prevent the economy from going into a recession.
Mining Difficulty Set to Resume Upward Trend
After a month of testing, Bitcoin network fundamentals are showing signs of a turnaround. According to the latest estimates from monitoring resources BTC.com and MiningPoolStats, despite reports of squeezed profitability, the mining sector is headed for a higher road.
Mining difficulty fell by 4.2% in the last auto-adjustment, but is expected to recover by 2.8% this week. This would bring the metric closer to a new all-time high, offsetting the impact of BTC price falling below $50,000 in early August.
Meanwhile, raw hashrate data shows that the processing power allocated to mining is still steadily rising, reaching a new all-time high on August 23, hitting 774EH/s, with known pools contributing 682EH/s.
Previously, Cointelegraph reported that while miner selling has decreased in recent weeks, their overall impact on BTC price action has been eclipsed by institutional investment forces.
Short-Term BTC Holders Dumped $10 Billion in a Week
As prices rebound, Bitcoins short-term holders (STH) have distributed a large amount of Bitcoin to the market over the past week.
According to data from on-chain analytics platform CryptoQuant, the weekly net position change for the STH group was down over $10 billion as of August 25.
This shows increased selling from STH, the platforms contributor AmrTaha wrote in a Quicktake blog post, citing a chart from analyst AxelAdlerJr.
STH entities are those who hold a quantity of BTC for no more than 155 days and represent the more speculative part of Bitcoin investors. The recent BTC price volatility has taken a toll on this group, with massive sell-offs occurring when BTC/USD plummeted to six-month lows.
Now, focus shifts to the aggregate cost basis of STH, which could become a potential support line once new price dips begin. According to investment firm MS2Capital, uploaded to X, the aggregate cost basis for STH is currently $63,600. It is lower for those with holdings of less than one month, among speculators, and sits between $60,000 and $62,000.
Crypto Rebounds Strongly from 'Extreme Fear' Edge
Perhaps unsurprisingly, last weeks BTC price recovery immediately impacted sentiment in the cryptocurrency market. This was reflected in the Crypto Fear & Greed Index, which moved from 26/100 on August 21 to 55/100 at the time of writing in a matter of days.
The shift in sentiment indicates that retail crypto investors mindset has moved from the brink of extreme fear toward greed.
The recovery is also reflected in CryptoQuants metric focusing on the sentiment in the Bitcoin futures market. It almost plunged into the extreme fear range in August.
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