Bitcoin (BTC) is starting a crucial macro week on a weak note as the 2023 BTC trend begins to look like a “double top.”
After a disappointing weekly close below $26,000, BTC/USD is struggling to capture buying interest amid a return to low volatility.
Analysts who were already predicting a downturn will continue to forecast new local lows, with liquidity conditions increasingly supporting their case.
Is there a glimmer of hope on the horizon? One on-chain indicator suggests that Bitcoin is “in the midst of” a major swing similar to March 2020.
Bitcoin’s Relative Strength Index (RSI), which has almost completely given up its year-to-date gains to reach its lowest level since the first week of January, may also rebound toward “fair value.”
Cointelegraph explores these topics and more in a weekly digest of key BTC price triggers.
Weekly closing price makes BTC price double top a reality
Bitcoin closing this week below a key trend line was already expected, but the reality may be worse than many are willing to admit.
This is the conclusion of popular trader and analyst Rekt Capital, who warns that a close below $26,000 will “likely” validate a double top structure on BTC’s weekly chart.
According to data from Cointelegraph Markets Pro and Cointelegraph Markets Pro, the current pattern of Bitcoin is two local tops for Bitcoin in 2023, both above $31,000, with a retracement to $26,000 in between. trading view show.
Due to the recent closing price, Bitcoin price is currently at risk of continuing to fall.
“A weekly close below $26,000 could confirm a double-top collapse,” Rekt Capital wrote Part of X post.
Further analysis points out that $26,000 has formed a support level for three consecutive weeks, so it would be significant on a weekly time frame to ultimately decide its fate.
Still, popular chartist JT said that while BTC/USD still posted its lowest weekly close since March Tell X followers believe there is still room for optimism. He believes this comes in the form of the 200-week exponential moving average (EMA) near $25,600.
“This week’s candle is a spinning Gyro Doji, a candle that signals indecision,” he wrote.
“But it’s worth noting that the last three weeks’ closes are within $400 of each other! Talk about boring and flat price action! The good news is that we’re closing well above the weekly 200EMA ($256,000).”
Cointelegraph previously introduced the importance of the 200-week EMA in the current BTC price environment.
Will the next futures gap be $20,000?
Bitcoin’s slow move lower has sparked debate over whether it can repeat classic chart behavior.
This primarily addresses the largest cryptocurrency’s habit of “filling gaps” in the CME futures market during weekends and holidays.
Here, the price difference between one week’s closing price and the next week’s opening price will often be attractive to Bitcoin’s future price action, but not always immediately.
BTC/USD typically “fills” gaps within days or even hours of futures markets resuming, but some gaps are left behind as time passes. A major gap on the radar right now is lurking at $20,000.
Rekt Capital explained in his latest report: “This is the only real CME gap we have in terms of downside movement at current price levels.” YouTube updates September 6th.
He went on to note that the gap from June 2022, which acted as a support and resistance level at multiple points since its creation, now acts as a resistance level, has now been filled.
“This CME gap has been filled multiple times and has transformed into a new resistance level,” he said, noting that the completion of the above-mentioned double top will also push gold prices back to the $20,000 area.
In this case, a potential price range for Bitcoin would form, with the $20,000 gap and the previously filled gap acting as support and resistance respectively.
Others, however, are undecided on the possibility of revisiting such a distant gap.
“Bitcoin has a long history with CME futures gaps. Sooner or later these gaps will be filled. But there’s no guarantee they will.” Titan, a popular trader in the cryptocurrency space debate.
He uploaded a chart of historical gaps and mentioned another gap that has yet to be filled, this time below $10,000.
“For some of you who have been in the cryptocurrency industry for a long time, you may remember the $9,600 gap from September 2020. At that time, everyone expected the gap to be filled so that they could eventually buy Bitcoin again. You guessed it What happened? It remains vacant to this day, with many people buying back in at over $20,000, waiting like crazy,” he wrote.
“There is a gap of $20,000 to $21,000 that has not yet been filled. Will it be filled? Well, anything is possible. However, until the market structure is broken, this is just wishful thinking.”
Liquidity increases to March levels
The overall liquidity situation in the Bitcoin/USD market has also led to bearish predictions for Bitcoin price.
Liquidity heatmaps are a common feature in the cryptocurrency trading community, helping to understand bid and ask concentration and how owners are manipulating these concentrations.
According to Cointelegraph, a large amount of bidding liquidity is currently concentrated around $24,000, which is the lowest concentration since March.
Honeybadger, a user with the pseudonym X, said: “There is a high possibility that the liquidity below will fall.” expectedupload a heat map like this.
Meanwhile, in the latest heat map posted by Binance, the world’s largest exchange by trading volume, on-chain monitoring resource Material Indicators continues to mark $24,750 as a key level where bulls can retain.
“Regardless, bulls must defend the $24,750 LL level to capture hopes of another move higher. Printing a new LL buys a ticket to Bearadise,” part of the accompanying commentary said.
Here’s how #BTC Ordered at @binance It’s arranged on the weekend.
I’ve pushed the “Volume Percent” filter into #FireCharts It’s important to highlight where liquidity lies, and the dark areas of illiquidity where there is a risk of being exploited. Not sure we’ll see much volatility… pic.twitter.com/5liaqi22q7
— Material Indicators (@MI_Algos) September 8, 2023
CPI leads FOMC by ‘huge’ the week before
After a quiet start to September, macroeconomic conditions have returned as a potential source of volatility in risk assets.
This week, U.S. consumer price index (CPI) data for August took center stage ahead of the Federal Reserve’s key interest rate decision.
Financial commentary resource “Kobeissi Letter” wrote in preliminary comments that “the last week leading up to the September Fed meeting has been very serious” and pointed out that there will be “a lot of volatility” ahead.
This is the last batch of inflation data before the Fed meeting.
Expect big moves this week.
We’ll be posting this week’s deals soon.
In 2022, our call rate reached 86%.
Subscribe to access our analysis and see what we’re trading:https://t.co/SJRZ4FrfLE
— KobeissiLetter (@KobeissiLetter) September 10, 2023
CPI, which expires on September 14, is known to be a volatile catalyst for BTC price action, but recent data has failed to change the status quo in the long term.
Still, cryptocurrency market participants included the release in their roadmaps, and the data could easily influence market expectations on how the Federal Reserve will adjust its benchmark interest rate.
According to CME Group, its next decision will be made on September 20 FedWatch ToolConfidence that interest rates will remain unchanged is high, which is a potential positive for risk assets including cryptocurrencies.
As of September 11, the probability of suspending interest rate hikes was over 90%.
Back to March 2020
As Cointelegraph reported over the weekend, an on-chain indicator suggests that current BTC price action may be more important than traders believe.
Related: Will Bitcoin Hit an All-Time High in 2025? Bitcoin Price Idea Reveals ‘Bull Run Starts’
UTXO losses, which measure the number of unspent transaction outputs (UTXOs) in on-chain transactions that are worth less than when they were purchased, are currently at their highest levels since March 2020.
as famous According to research from on-chain analytics company Glassnode, UTXO losses do not measure the number of BTC lost, but the number of UTXOs involved.
A Research update Nonetheless, on-chain analytics platform CryptoQuant warned that Bitcoin may be dealing with a “black swan” event, similar to the one that led to a 60% drop in BTC prices three years ago.
“Given that the current levels of the ‘UTXO Loss’ metric reflect a black swan event during March-April 2020 (due to the coronavirus), those anticipating another black swan event may want to consider whether we are already in one and they are The event that awaits,” wrote its author Woominkyu, a CryptoQuant contributor.
This article does not contain investment advice or recommendations. Every investment and trading activity involves risks, and readers should do their own research when making decisions.
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