Bitcoin (BTC) is starting the week on a positive note as traders welcome the first green weekly candle in over a month. The price of BTC is steadily improving after a weak August and start of September, with BTC/USD climbing towards $27,000. This solid weekly close sets the stage for an interesting week, which will include a key United States macroeconomic event that could drive volatility in the market. The Federal Reserve will meet to decide on interest rate policy, and any surprises could have significant effects on risk assets, including cryptocurrencies.
Bitcoin’s network fundamentals are also looking promising, with network activity set to reach new record levels. Despite the price action of BTC, the number of Bitcoin wallets continues to rise, indicating strong hodler behavior. This underlying strength in the market is reflected in the optimism of traders.
Some traders believe that Bitcoin has potentially found a “local bottom” and expect the price to push back up to $27,000 and beyond. Others, however, remain cautious and warn of a possible bearish double top pattern forming on weekly timeframes.
The focus of the market this week is on the Federal Open Market Committee (FOMC) meeting where interest rate decisions will be made. While markets expect rates to remain the same, any unexpected decision could lead to increased volatility across all assets, including cryptocurrencies.
Bitcoin’s mining difficulty and hash rate are also set to reach new all-time highs. Mining difficulty, which determines how difficult it is to mine a Bitcoin block, is expected to increase by 4.6%, while the estimated processing power of miners continues to set records.
In terms of user adoption, the number of new Bitcoin wallets being created is at its highest level since late 2017. This indicates that despite the price fluctuations, interest in Bitcoin and cryptocurrency continues to grow.
However, the overall sentiment in the crypto market remains one of caution, as reflected by the Crypto Fear & Greed Index, which shows that fear still dominates investor sentiment.
Overall, Bitcoin’s performance this week will be closely watched as traders navigate the potential volatility driven by the FOMC meeting and continue to assess the market’s underlying strength and potential for future growth.
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