Bitcoin (BTC) has been lacking momentum this week, as BTC price predictions suggest the market is headed for a downward trend.
With a highly anticipated weekend ending with a bitter result at the end of the week, BTC/USD is not providing much inspiration to traders already tired of range-bound moves.
Sentiment is poor and while stocks have recovered from their early August crash, cryptocurrencies have yet to recover.
What could shake things up?
The U.S. Federal Reserve is in the spotlight at the annual Jackson Hole Symposium this week.
Fed Chair Jerome Powell is set to speak about the current macroeconomic situation as traders look for clearer signals about a rate cut next month.
This could end the weekend on a volatile note, but there are growing concerns that Bitcoin could lead cryptocurrencies into a downtrend again.
Analysis shows that $50,000 is at stake and miners are taking a cool-headed approach, but there is still uncertainty in the market.
With August showing no signs of a new all-time high, Cointelegraph takes a closer look at the key crypto issues being discussed by investors.
No talk of BTC price rise
Bitcoin gave up its weekend gains with a weekly close on August 18, a series of events all too familiar to traders who traditionally pay attention to “over-the-counter” market movements.
Nevertheless, the Asian trading session did not offer much hope for bulls, with BTC/USD trading around $58,650 at the time of writing, according to data from Cointelegraph Markets Pro and TradingView.
BTC price action has frustrated commentators as no meaningful trend emerges.
“It’s been a boring weekend. Prices will probably continue to fall for another week before we see any big moves,” popular trading account Logical TA wrote in part of its latest market report on X.
“$BTC has been crashing for the past 160-170 days. It’s more painful than a bear market.”
Fellow trader Roman agreed, seeing a return to near $55,000 as a possibility.
“It’s slowly but surely heading towards 55k support. At that point I’ll look for a long. The original uptrend was weak so my thinking has been the same for the last 2 weeks,” he told X followers.
Roman added that the Bollinger Bands volatility indicator should provide advance signals that the market is ready to break out in a certain direction.
Meanwhile, trader CrypNuevo, who analyzed both long-term and short-term targets, saw a “buying opportunity” near $50,000.
“$53.6k and $51.5k are two potential levels where price can go to fill the wick on 1W and 1D time frames,” he explained in part of the X thread.
“So if you missed that move, you can probably buy back in at those levels.”
CrypNuevo warned that there could be a “fakeout” of an uptrend in the coming days before prices move lower again.
“Most retailers will pay attention to this channel and trade on it. So you can see some manipulation by market makers here,” he explained, along with explanatory charts.
“We could see a fake price above it early this week and then a new week down to $56,000.”
Markets are anticipating Powell’s Jackson Hole appearance
This week, risk traders are watching the Federal Reserve’s Jackson Hole symposium as they look for clues on how inflation will be handled in the market.
The annual event will feature a speech by Federal Reserve Chairman Jerome Powell on August 23, and market watchers will closely analyze his remarks for confirmation of future policy easing.
Markets are jittery after weeks of stock market crashes that began in Japan. Markets believe the Fed will be forced to cut rates at its next meeting in September.
According to the latest data from CME Group’s FedWatch tool, the odds of a rate cut of any kind remain at 100%, with a 71.5% chance of a 25 basis point cut.
Commenting on the current situation, trading source The Kobeissi Letter acknowledged the impressive comeback of stocks after the Japanese shock. As Cointelegraph reported, it took only a few days for Japan’s Nikkei 225 to erase its biggest two-day decline in history.
In the X thread it was stated that “The S&P 500 is now just 2% away from a new high.”
“The market is in correction territory in just a few days and is looking to make new all-time highs.”
CrypNuevo then predicted that it would be a “very interesting week.”
“It’s an event attended by central bankers from around the world and usually brings volatility,” he told X followers.
“Powell will talk about the upcoming rate cut this year. Hot take: Powell could say, ‘A 50 basis point cut in September is not on the table right now.’”
Bitcoin Miners Stop Losing Money to Wallets
The optimism surrounding Bitcoin miners continues this week, with one on-chain metric showing that BTC sales are cooling.
On-chain analytics platform CryptoQuant showed in one of its Quicktake blog posts on August 19 that BTC holdings in known miner wallets were starting to stabilize.
“Miners have been selling bitcoins over-the-counter and on exchanges until recently, but there has been no sign of sales since late July,” contributor Crypto Dan summarized.
Despite the recent significant price decline, miners have yet to reassess profitability, even though the cost of producing Bitcoin is now comparable to the spot price.
Popular crypto commentator MartyParty added to CryptoQuant data that “miner holdings are currently at January 2021 levels.”
“It appears that the sale of the miners has been completed.”
As of August 18, miners’ holdings stood at 1,814,000 BTC, a decrease of approximately 25,000 BTC since the beginning of the year.
Meanwhile, Crypto Dan isn’t entirely confident that things will remain stable going forward.
“While one indicator only shows the positive side, I think it is worth watching the market a little longer, given that miners are like whales and their moves always create big market moves,” he concluded.
BTC Market Dominance Shakes
Traders say Bitcoin’s share of the overall cryptocurrency market has recently reached a macro peak.
Bitcoin’s dominance, which was close to 58% earlier this month, is faltering and altcoins will ultimately benefit.
Popular trader Mikybull Crypto announced on X on August 19 that “Bitcoin’s dominance is finally reaching its final stages,” and predicted that the index would see a “huge crash” in Q4, sparking an altcoin renaissance.
The accompanying chart uses Elliott Wave theory to suggest that dominance will recover below 50% levels, where it currently sits at around 57%.
Michael van de Poppe, founder and CEO of trading firm MNTrading, also predicted the “end of the bear market” for altcoins.
“The real replacement price starts when BTC.D drops below 50%,” fellow trader Kaleo continued last week in an X thread on the topic.
Kaleo concluded that he was “fairly confident” that macro tops would dominate.
“Bearish sentiment” where the trend line is out of reach
Some recent analysis concludes that sentiment towards Bitcoin is definitely “bearish” as the price recovers below the major long-term trend line.
Related Article: Will Bitcoin Price Crash Again?
CryptoQuant contributor Axel Adler Jr. believes that BTC/USD could be in trouble if it breaks below its 200-day simple moving average (SMA), which currently stands at $62,750.
He wrote on X that “BTC price is trading below its 200-day SMA, which officially indicates a downtrend.”
Adler uploaded CryptoQuant data showing leverage usage on exchanges, which has soared to its highest levels since the Japanese financial crisis.
He also warned that “leverage has been increasing on the top three exchanges recently.”
“The nearest support level is the 365-day SMA ($50K).”
Meanwhile, the latest data from the Crypto Fear & Greed Index puts the average sentiment among cryptocurrency investors at 28/100, just three points shy of “extremely fearful.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.