Bitcoin (BTC) is enjoying its first full week in September, and BTC price action is at a crossroads — can it return to $26,000?
After a quiet weekend, last week’s volatility has settled down as the cryptocurrency market returns to “business as usual.”
Bitcoin hovers in familiar territory, but without a trend, with traders and analysts still undecided on its next move.
There is certainly no shortage of downside BTC price predictions, with $25,000, $24,750 and even $23,000 all becoming popular targets in recent weeks.
The Bulls, on the other hand, are thought to face a tougher task in winning back market momentum.
The question of whether September 2023 will be a typical single-digit loss month for BTC/USD is now a talking point, as network fundamentals will consolidate recent gains and macro markets are calm.
Cointelegraph looks at the main factors influencing BTC price action in the coming days.
Bitcoin Price Cuts Bitcoin Shorts Over the Weekend
Bitcoin delivered few surprises during the weekend’s off-hours trading — and with U.S. stocks only opening on Sept. 5, that status quo is likely to continue.
Data from Cointelegraph Markets Pro and Cointelegraph Markets Pro show that BTC/USD has been trading in the $200 range for most of the past two days. transaction view suggest, but the modest up-and-down volatility masks the presence of speculative exchange participants.
This was noticed by popular trader Skew, who uploaded order book data showing that Bitcoin’s brief break above $26,000 was due to failed shorts.
bitcoin dollar
The position was still blown out on Sunday’s $200 price move lolThis slight uptick is shorts being blown or closed in the market pic.twitter.com/7ih2KpjEEq
— Skew Δ (@52kskew) September 3, 2023
“All it takes is someone figure out where the stops are, the market buys a few million dollars spot, then dumps it after forcing some shorts,” added an Extra X (ex-Twitter) comment.
Additional BTC spot market analysis questioned whether a weekly close around $25,970 would end up being a scheme to give bulls a false sense of security.
bitcoin dollar
Operation to save 1W or operation to trap bulls until Tuesday? pic.twitter.com/pP4JbeHzXC— Skew Δ (@52kskew) September 3, 2023
As reported by Cointelegraph, Skew has set $25,900 as a level to maintain until the weekly candle closes.
However, for trader and analyst Rekt Capital, any price below $26,000 raises concerns over longer time frames.
He warned over the weekend that a failure to recover that level would risk a double-top structure in 2023, with bitcoin’s price ceiling around $31,000, and a long-term downside ahead.
“BTC weekly candle close below $26,000 (green) could confirm a double top, kickstarting the crash process,” he commented On the graph showing the settings.
Fed speaker focuses on macroeconomic week
Meanwhile, a cool macro week may bring some relief to risk asset traders.
With little major macroeconomic data to come out of the U.S. over the next four-day week, the focus will be on the Federal Reserve itself.
A number of senior Fed officials will comment on the state of the economy this week ahead of a Sept. 19 decision to tighten interest rates this month. These include Atlanta Fed President Rafael Bostic and New York Fed President John Williams.
“One week is short, but it’s all about the Fed,” financial commentary resource Kobesi Letter Summarize On X, and major diary dates for the next few days.
It added that Fed policy “remains far from clear” ahead of the rate decision.
Bitcoin has become noticeably less sensitive to comments from the Federal Reserve this summer, with even comments from Fed Chairman Jerome Powell failing to have a significant impact on Bitcoin’s price action.
Still, comments from officials could upend market expectations for the Fed’s fight against inflation.
As of this writing, according to data from CME Group Fed Watch Toolthe market is overwhelmingly expecting – with 93% certainty – that interest rates will remain unchanged in September.
Difficulties caused by pullback from all-time highs
Bitcoin mining difficulty is dropping after surging to an all-time high two weeks ago.
In moderate consolidation, difficulties are expected to be decreased by about 2.4% Autotuning will take place on September 5th.
That’s not unusual by historical standards, especially considering the 6.5% rise in mid-August — a rise that came despite BTC price movements in the opposite direction.
James Straten, a research and data analyst at cryptocurrency insight firm CryptoSlate, pointed out that Bitcoin miners’ BTC inventory has decreased accordingly when analyzing potential reasons.
“At the same time, miner balances decreased by about 4000 BTC, mainly from F2Pool, whose BTC balances were cut in half,” part of X’s comments over the weekend read.
Straten added that any further decline in Bitcoin’s price performance could lead to additional pressure on miners, exacerbating the F2Pool trend.
“If Bitcoin falls again, we could see another miner capitulation,” he warned.
In response, IT Tech, a contributor to on-chain analytics platform CryptoQuant, mentioned a correlation between “small” BTC price drops and miners sending BTC to exchanges.
“This action of course increased the selling pressure, which eventually caused them to sell off in the market,” excerpts from a recent commentary pointed out.
IT Tech Says BTC Sale Was Small, But It Happened At “The Worst Moment.”
Dormant Bitcoin supply hits new record
Behind the scenes, Bitcoin’s supply is gradually becoming the property of long-term holders.
New data from on-chain analytics firm Glassnode has revealed several new records related to long-term stored BTC.
Percentage of dormant supply currently mined three years or more It is currently at 40.538% – an all-time high.
Equivalent measures for securing coins in wallets at least five years It is now 29.637% – also a new record.
Tight supply is a welcome sight for bitcoin bulls, who conclude that any future demand for bitcoin will cause buyers to scramble for less supply.
In a recent analysis, Straten also pointed out that Bitcoin speculators, often referred to as short-term holders, have allocated BTC to the market.
“Bitcoin short-term holders are again sending about 20,000 BTC at a loss to exchanges,” he said. wrote In the weekend.
“The fourth highest amount this year. This will continue to exacerbate the record gap between the supply of long-term holders and short-term holders.”
Accompanying Glassnode data shows that short-term holders are losing money sending the amount of BTC to exchanges.
Interest to turn back the clock to 2020
For the Average Non-Crypto Consumer This Year, Bitcoin Is Hardly a Mainstream Talk, Google Trends Data prove it.
Related: ‘100% Bulls Hit’ Bitcoin Indicator Predicts BTC Price Floor at $23,000
Normalized search interest has now returned to levels seen before BTC/USD breached the 2017 all-time high of $20,000 in late 2020.
Search activity is closely tied to BTC price action, and the lack of notable upside events throughout Q2 seems to have contributed to the lackluster mainstream attention.
Meanwhile, in the cryptocurrency space, ordinary investors are terrified.
According to the sentiment index, Crypto Fear and Greed Index“Fear” characterizes the overall mood in the market right now.
The index, at 40/100, is in familiar territory since mid-August, when Bitcoin fell 10%.
This article does not contain investment advice or recommendations. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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