After the euro which returns below parity, the most pessimistic expect to see the BTC join a polarity zone at 13,000 dollars. After failing to rise above $25,000 last week, the decline resumed against a strong dollar. A busy week on the macroeconomic front could contribute to complicate matters, culminating in probable announcements of monetary tightening. We take stock.
Technical analysis: Bitcoin, an upcoming range between $19,000 and $24,500
After successively breaking its supports at 23,000, 22,000 and then 21,000, Bitcoin managed to preserve the famous support of 20,000 dollars. However, the prospects for a rise in interest rates and the recent desertion of institutional investors show that the bear market is far from over.
BTC/USD in Day View – TradingView
In the short term, Bitcoin has been stabilizing since Sunday at the 21,000 support. A stabilization phase will probably take place within a range between 19 000 et 24 500 dollars. Breaking one of the two terminals will set the tempo for the rest.
In the medium term, the technical analysis also suggests a continuation of the decline. It is clear that the BTC has validated a double top on its weekly chart, and that the Ichimoku displays a red cloud for the next candles.
The most pessimistic speak of a polarity zone at $13,000. However, it will take a break of the support at $19,000 to give credence to this hypothesis.
BTC/USD Weekly View – TradingView
As for the dollar, it shows no sign of a reversal, neither in the indicators nor in the configuration of its weekly candles. The euro even fell below parity again at the time of this writing ($0.99508).
DXY Weekly View – TradingView
New selling pressures to come? 141,000 BTC about to be released by Mt. Gox
More than 8 years after its bankruptcy judgment in Japan (February 2014), the platform Mt. Gox set to return 137,000 BTC to its customers whose accounts had been frozen.
As a reminder, Mt. Gox managed between 2010 and 2014 more than 80% of cryptocurrency exchanges. Victim of a hack, she would have lost 850,000 BTC graduallyfor several months, until February 2014. 200,000 tokens had been “found” by its founder Mark Karpelès, for a time nicknamed “the Baron of Bitcoin”, on an old wallet … inactive since 2011.
Does this massive release of bitcoins represent a danger for the course?
It’s hard to fault investors forced to HODL their bitcoins for three bull cycles in a rowand who are at 80 – 100x their initial investment…
Because even if the BTC evolves at 70% of its historic peak, it is far from the 820 dollars of February 2014. Hostile environment or not, many of these cheated investors will be tempted to take a minima 50% of their profits.
Mt. Gox wanted to reassure everyone by announcing that they would reimburse investors in a phased manner, in order to avoid fueling excessive selling pressure.
“If the sale of Mt. Gox bitcoins were to have the same effect, it would surely drive the price towards $10,000. However, in the previous months, such selling pressure has already been experienced, particularly with the Luna crash or the 3AC crash, and did not drive the price so low” (Cryptonaute, Will Mt Gox BTC Deal Plunge the Market?)
This week’s highlight: Jerome Powell’s talk at the Jackson Hole Economics Symposium
The markets will have their eyes on Jackson Hole (Wyoming), where from August 25 to 27 the Economic Policy Symposium hosted by the Kansas City Federal Reserve.
Pretty much, it’s the annual briefing and review meeting of the world’s central bankers, led by the boss of governors – Jerome Powell, Governor of the Federal Reserve. ECB President Christine Lagarde will not make the trip and will be replaced by Isabel Schnabel.
Two key moments to follow:
- The lecture by Jerome Powellon Fridays at 10 a.m. local time (4 p.m. Paris time).
- The reaction of the dollar index (DXY) to this speech.
After the publication of the CPI (“Consumer Price Index”) on August 10 and the NFP report (“ Non-farm payroll ) on the labor market in the United States on August 5, the conference will give additional clues as to the next actions of the Fed.
It is very likely that Jerome Powell will say that the Fed will maintain its desire to raise rates for as long as necessary to bring inflation back to 2%.
Clearly, key rates, currently at 2.50%, will certainly increase to 3.25% on September 21 – then at 3.50% on November 2. The CME puts the probability of this happening at 56.5% (see picture below).
56.5% chance of seeing the Fed raise its rates from 2.50% to 3.25% at its next meeting (September 21)
Considering the correlation between Bitcoin and stock indicesthe Fed’s monetary policy is a theme followed very closely by investors.
BTC’s test of $25,000 was primarily triggered by an anticipation that the Fed might ease policy and cut interest rates if inflation started to ease (and the US economy entered a recession).
However, there is no indication that this is about to happen, so we mustexpect BTC – and all altcoins – to suffer encore.
Can we expect a “flipping” to come?
However, should we expect a major divergence between bitcoin and ethereum?
You probably know the « flippening “, this moment when the capitalization of Ethereum will exceed that of Bitcoin. This theory has made a comeback on social media in recent days and several analysts are suggesting that the reversal could even take place sooner than expected.
It will not have escaped your notice that Ethereum’s switch to proof-of-stake (PoS, Proof-of-Stake) on its mainnet is expected for September 15th. After a successful merger on its various testnets (Ropsten, Sepolia and Goerli), the actual fusion – “ The Merge – will therefore be the next step.
Where a problem emerges is that The Merge coincides with the release of bitcoins from Mt. Gox.
On paper, we are still far from it: the BTC in circulation are valued at nearly 409 billion dollars, against less than 19 billion for ETH. But the zero risk does not exist, this hypothesis will still take on thickness as we approach The Merge.
With the rise of the Dollar, we are starting to get information on the next Fed meeting, as many investors are already anticipating a one-notch increase in interest rates. 3-month BTC futures are already bearish. This means that even institutions are beginning to integrate that the Fed will only be accommodative when US inflation is back at 2%.
