Bitcoin (BTC) is facing a difficult start to the week as it struggles to maintain a price of $26,000. August has proven to be the worst month of 2023 for BTC, with its price remaining uncertain and a potential downside surprise in store as the month comes to a close.
This week, macro triggers are taking a back seat as the highlight of the week is the release of the Personal Consumption Expenditures (PCE) Index data. Traders and analysts are on high alert and are preparing for worse to come as there is no sign of a rebound in sight.
BTC’s price performance in the week ahead looks bleak, as it closed the previous week at $26,000 and immediately started to decline. It reached a low of $25,880 before stabilizing slightly higher. Popular trader Skew predicts that the pressure from short sellers will continue into the new week. The monthly close is a key concern for market participants, with volatility expected after a month of 11% losses.
There is a lack of buying activity from whales, as shown by the low order volume on the Binance BTC/USD order book. Traders and analysts are looking for a trigger that could push the price to lower lows, possibly around $25,000, before a potential rebound. Moving averages, which previously acted as support, may now act as resistance, further adding to the bearish sentiment.
August 2023 has proven to be one of the worst Augusts for Bitcoin since 2015, with a 13.9% drop in price. Some believe that September could be just as bad based on historical data. A drop of 18% this August could bring the price of BTC to around $24,700, with potential further retracement to $22,200 in September.
When analyzing year-on-year percentage returns, it becomes clear that Bitcoin is experiencing its longest bear market in history. Despite positive news events such as the potential approval of the first Bitcoin spot price exchange-traded fund (ETF) in the United States, the market remains stuck in a bearish mode.
Macroeconomic developments, including Federal Reserve interest rate changes and data releases, have had little impact on the crypto market. This trend is expected to continue this week, even with the release of PCE data, nonfarm payrolls, and unemployment data.
Despite the overall bearish sentiment, there is some optimism surrounding Bitcoin miners. It is expected that as the block subsidy halving approaches in April 2024, miners will bid Bitcoin higher, creating a buzz around the halving narrative. The hash rate, which measures the processing power dedicated to mining, has reached all-time highs, indicating a potential miner bull run leading up to the halving.
In conclusion, Bitcoin is facing a challenging week with the potential for further price declines. The month of August has been particularly difficult for BTC, and September may bring similar challenges. Traders and analysts are closely monitoring the price performance and looking for potential triggers that could lead to a rebound. Despite the bearish sentiment, there is some optimism around Bitcoin miners and the potential impact of the upcoming block subsidy halving.
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