Bitcoin (BTC) kicks off its first full week of September with BTC price action at a crossroads – can $26,000 make a comeback?
After a quiet weekend, the dust appears to have settled on last week’s volatility as cryptocurrency markets return to “business as usual”.
Bitcoin finds itself stuck in familiar territory, but with no direction, traders and analysts remain hesitant about its next move.
There is certainly no shortage of bearish bitcoin price predictions – $25,000, $24,750 and even $23,000 have become popular targets in recent weeks.
On the other hand, it is believed that the bulls face a more difficult task in regaining market momentum.
With network fundamentals cooling due to recent gains consolidating its own and macro markets, the question of whether September 2023 will be a classic month of single-digit losses for BTC/USD is now a moot point.
Cointelegraph takes a look at the main factors affecting BTC price movement over the coming days.
Bitcoin price over the weekend lowers BTC short positions
Bitcoin presented some surprises in the weekend off-hours trading – a status quo that could continue with US stock markets only opening on September 5th.
For most of the past two days, the BTC/USD pair has moved in a narrow corridor at $200, according to data from Cointelegraph Markets Pro and TradingView The offers – but the modest ups and downs belied the presence of speculative stock players.
This was noted by popular trader Skew, who uploaded order book data showing that failed shorts were behind Bitcoin’s short flights above $26,000.
Positions are still exploding in $200 price action on Sunday
This mini bob was the hit or miss short of the market pic.twitter.com/7ih2KpjEEq
– skew Δ (@52kskew) September 3, 2023
“All it takes is for someone to figure out where the stops are and buy the market a few million at the spot price and then dump them after being forced to sell some shorts,” added part of an additional comment by X (ex-Twitter).
Additional analysis of the Bitcoin spot market wondered if the weekly close, which reached around $25,970, would end up being a scheme to give bulls a false sense of security.
– skew Δ (@52kskew) September 3, 2023
As Cointelegraph reported, $25,900 was already on Skew’s radar as the level to hold until the weekly candle close.
However, for fellow trader and analyst Rekt Capital, anything much below $26,000 was cause for concern on the longer time frames.
He warned over the weekend that failure to reclaim this level would mean risking the double top structure of 2023, with space around $31,000 as a ceiling for bitcoin price and a prolonged downside ahead.
“BTC weekly candle close below $26,000 (green) is likely to confirm the double top to start the breakdown process.” comment On a diagram showing setup.
Fed speakers make headlines for the entire week
Meanwhile, a cold overall week is a potential source of slight relief for risk-asset traders.
The next four-day week for the US holds little in the way of significant macroeconomic data, with the focus on the Fed itself instead.
Ahead of this month’s painful rate decision on Sept. 19, several senior Fed officials will be making comments on the state of the economy this week. These include Atlanta Federal Reserve Bank President Raphael Bostick and New York Federal Reserve Bank President John Williams.
“Short week, but it’s all about the Fed,” the source of the financial commentary is Risala Al Qubaisi summed up On the X next to the main diary dates for the coming days.
He added that the Fed’s policy was “still far from clear” in the run-up to the rate decision.
Bitcoin has become significantly less sensitive to the Fed’s comments over the summer, even as Fed Chair Jerome Powell was unable to influence Bitcoin’s price action significantly.
However, the words officials use could upend market expectations about what might happen in the Fed’s inflation battle.
At the time of writing, according to data from CME Group Videowatch toolMarkets overwhelmingly expected – with 93% certainty – that interest rates would remain unchanged in September.
Difficulty due to falling from all-time highs
After surging to an all-time high two weeks ago, the difficulty of mining Bitcoin is starting to show itself on the ground.
In the case of modest coherence, difficulty is to be expected decreased by 2.4% In the next automated adjustment on September 5th.
This is nothing unusual by historical standards, especially in light of the 6.5% increase seen in mid-August – a support that has come even though Bitcoin’s price action is going the other way.
Analyzing the possible cause, James Stratten, research and data analyst at cryptocurrency insights firm CryptoSlate, pointed to an accompanying drop in the BTC inventory of bitcoin miners.
“This coincided with the miner’s balance dropping by around 4k BTC, primarily from F2Pool who saw their BTC balance halving,” is part of the Weekend X comment. is reading.
Stratten added that any further decline in Bitcoin’s price performance could put additional pressure on miners, exacerbating the trend in F2Pool.
“If bitcoin faces another decline, we will likely see another miner capitulation,” he warned.
In response, IT Tech, a contributor to the on-chain analytics platform CryptoQuant, pointed to a correlation between minor drops in bitcoin prices and miners sending bitcoins to exchanges.
“This action, of course, increased the selling pressure, which eventually pushed them to sell in the market,” an excerpt from recent comments advertiser.
IT Tech described bitcoin sales as modest in size but occurring “at the worst moment”.
Idle BTC supply is setting new records
Behind the scenes, the supply of bitcoin has steadily become the property of its long-term holders.
The latest data released by on-chain analytics firm Glassnode reveals several new records related to Bitcoin being locked up in long-term storage.
The percentage of currently mined supplies that are now idle three years or more It’s now at 40.538% – the highest ever.
The equivalent scale of fixed coins in wallets five years at least It now stands at 29.637%, similarly a new record.
The shrinking supply is a welcome sight for the Bitcoin bulls, who reason that any future demand for Bitcoin will see buyers competing for less supply.
In a recent analysis, Stratten also noted that Bitcoin speculators, commonly called short-term Bitcoin holders, have already distributed Bitcoin to the market.
“Once again, short-term bitcoin holders have resigned themselves to nearly 20,000 bitcoins sent to exchanges at a loss.” books in the weekend.
“Fourth highest amount this year. This will continue to increase the record disparity between long-term and short-term supply.
Accompanying Glassnode data showed the volume of bitcoins sent by short-term holders to exchanges at a loss.
Attention turns the clock back to 2020
Bitcoin is hardly going to be a major topic of conversation for the average non-crypto consumer this year, and Google trends The data prove it.
Related: Bitcoin Metric With “100% Long Success Rate” Predicts Minimum BTC Price Of $23K
Natural search interest has now returned to levels seen before BTC/USD surpassed its all-time 2017 high of $20,000 in late 2020.
Search activity is highly correlated with Bitcoin price action, and the lack of notable bullish events throughout the second quarter seems to have contributed to the mainstream interest.
Meanwhile, the average investor is feeling intimidated in the cryptocurrency space.
According to the sentiment scale, the Index of fear and greed in cryptocurrencies“Fear” is what characterizes the general mood of the market right now.
At 40/100, the index is in familiar territory since mid-August, when Bitcoin fell by 10%.
This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should do their own research when making a decision.