Bitcoin (BTC) begins a crucial week on a firm footing as the bulls manage to erase weeks of losses.
BTC/USD is back on the radar as a long bet after the latest weekly candle closed at $21,800, the highest since mid-August.
With sideways price action now finally firmly visible, volatility is expected to become a major theme in the coming days.
In fact, few weeks in the history of bitcoin have been as busy as it is likely to be.
In addition to the Ethereum merge on September 15, the inflation trend of the United States will come under scrutiny on September 13 with the release of August Consumer Price Index (CPI) data. Unpredictability is a recipe.
How will bitcoin weather the storm? While the macro picture looks muddy for riskier assets as the United States dollar rises, on-chain data already points to a price downside.
Furthermore, bitcoin’s network fundamentals are set to hit new all-time highs this week, underscoring miner resilience and recovery, along with firm belief in profitability.
Cointelegraph takes a look at several key areas to see if bitcoin gives “September” a run for its money as bitcoin.
Solid weekly close boosts short-term BTC bets
The latest weekly close provided some much-needed relief for bitcoin bulls.
After weeks of pathetic performance, BTC/USD finally managed to seal a solid week’s gains, even avoiding a last minute correction in the closing candle, data from Cointelegraph Markets Pro and TradingView show.
Thus, the September 11 event, just above $21,800, formed a solid foundation for the week, giving it a lot of volatility.
At the time of writing, that level is forming a consolidation zone, coinciding with an important trendline as the real price of bitcoin. According to on-chain analytics firm Glassnode, it currently sits at around $21,770.
BTC/USD has yet to deal with the more important bear market levels it lost as support last month, with the 200-week moving average now near $23,330 as key.
The overnight rally to $22,350 on Bitstamp caught the attention of traders, pushing existing calls to continue.
“It was just the initial supply at 22300,” said Crypto’s popular Twitter account Il Capo. wrote In one of several recent updates:
“There is still a possibility to think 23k. Then we see the reverse.”
yet another tweet warning That “major resistance” is now coming into play in bitcoin and altcoins.
“In my opinion, we soon see a final phase of 5-7%, then LTF distribution, then nuclear. Get ready,” it said.
In a sign of the onset of impending volatility, fellow trader trades noted With Bitcoin tagging its upper Bollinger Band on the daily time frame, the band is now slowly spreading to make way for a wider trading range.
Inbound CPI Combines with Fall in Dollar
One of two main points in BTC price action for the week comes from a familiar source: the United States Federal Reserve.
The CPI data is for August, and expectations rest on a declining inflationary trend, which continues after the July print peak.
Heavy week is coming;
– CPI data, which will probably give a direction towards the Fed.
, $ETH The merge is coming, one of the biggest blockchain events in the past years.
– climax on the strength of $dxy potentially coming.
fire.
— Michael van de Pope (@CryptoMichNL) 12 September 2022
If this happens, it will be a boon for riskier assets which are suffering heavy losses due to the rise in the US dollar.
According to CME Group’s FedWatch tool, the Fed’s Federal Open Market Committee is nonetheless likely to raise the interest rate by 75-basis-point at its September meeting next week.
For dollar watchers, however, there is already reason to believe that the return of the riskier asset will consolidate itself in the coming days.
US Dollar Index (DXY), fresh from 20-year highNearly 2.7% have fallen in just four days.
My calculator cannot calculate the number of negative comments received after tweeting $dxy Sell signal. https://t.co/ENGqkgkb1v pic.twitter.com/r4VlfIVvSR
— Trader_J (@Trader_Jibon) 12 September 2022
“One thing that makes me doubt my negative bias for bitcoin and crypto in general, even after the ETH merger, is DXY,” analyst Mark Cullen, creator of trading resource AlphaBTC, said. revealed,
“We see potential for 3 drives [bear] The divergence formed on the RSI and the September FOMC is Wed next. I wonder if we see $DXY break out of the parabola and move up the risk asset.”
Meanwhile, Phoenix Copper executive Donald Pond called the USD and DXY charts “the most important”.
“The dollar is very strong ATM, and is killing everything else,” he tweeted that day.
“It has dropped sharply over the past few days but is still in a strong uptrend. There is no permanent bounce for the markets until the trend breaks.”
merge is here
Complementing the encouraging inflation data is a purely intrinsic price trigger – the Ethereum Merge – around September 15th.
The event, now set to become a reality after months of uncertainty, sees Ethereum as a network transition from proof-of-work (PoW) to proof-of-stake (PoS) as its hashing algorithm Is.
The hype is building on social media and beyond, and now, analysts are wondering what will happen in the immediate aftermath — specifically, whether investors will “sell the news” and bring the market down soon after the merge is complete.
big week for #ethereum And #crypto community with upcoming merge
These events create more liquidity, which can be used to profit from the whales through engineering certain moves and looks.
If you already have a ️. If you are not, then do not rush into the situation
— Krypto Tony (@CryptoTony__) 12 September 2022
Everyone is raving about whether they should lengthen the merge or shorten the merge
Feels Like One Of These Games Where The Best Move Is Not To Play
— Udi Wertheimer (@udiWertheimer) 12 September 2022
In a dedicated update released on 10 September, trading platform DecenTrader stressed the need to exercise caution and avoid the “only-up” mentality.
“It is important to remember that there are a number of potential headwinds that could turn things in the bear’s favor, namely bugs in the merge code, with a significant proportion of the Ethereum network shifting to forks taking market cap with it, as well as macro Headwinds from US August CPI data next week,” it wrote:
“It is also important to remember that overall, macro and geopolitical systematic risks remain that could halt the bullish story for ETH. Let’s see if the price can hold, post the merge.”
DecenTrader compared bitcoin hard forks in the second half of 2017 and later. Now, until then, the danger of distraction remains.
“Long-term, there are fundamental changes in the merge, which we are interpreting as bullish for Ethereum, but the actual event will undoubtedly prove volatile as the market wrestles between narratives,” the update concluded:
“Be extremely wary of scams, fork tokens, etc. We have already seen many around merges and ETHPoW forks.”
ETH/USD was trending down for the second day in a row at the time of writing, eyeing $1,760 after hitting a local high of $1,760.
Difficulty, hash rate tackles highest level ever
Bitcoin’s network fundamentals have been anything but bearish lately, and this week, the trend continues to hit new highs.
Bitcoin’s mining difficulty and hash rate have both taken a hit or are due to hit new all-time highs in the coming 48 hours on September 12th.
According to estimates from monitoring resource BTC.com, the next automatic adjustment will increase the difficulty by 3%, sending it into uncharted territory with a total of 31.91 trillion.
This follows a previous jumbo re-adjustment of 9.26% two weeks ago, the biggest increase since 2021, as well as serving as a firm sign that miner competition is healthier than ever.
Indeed, since their latest “capitulation” phase According to on-chain data that ended last month, miners are racing to add hash power to their operations. This is exemplified by the hash rate – the estimated combined hashing power of the bitcoin network – rising to levels never seen before in recent days.
According to MiningPoolStats, that spike occurred on September 5 and involved a brief trip of 298 exhash per second (EH/s). The hash rate is currently just under 250 EH/s.
Meanwhile, analytics platform TheTIE, noted That the increase in hash rate has pushed the timing of the next bitcoin block subsidy halving event.
“As the bitcoin hashrate rises to an all-time high, there is an important second order effect to remember: the halving. Previously, this was expected for 2024, but is now projected for the next $BTC halving. The date has been moved to Q4’23,” it commented along with the hash rate chart.
excessive fear proves sticky
As the data and analysis seem, the overall crypto market still can’t shake the foreboding sentiment.
RELATED: Crypto Traders Watch ATOM, APE, CHZ and QNT as Bitcoin Shines Down Signs
The Crypto Fear and Greed Index, after a brief escape, is back in “extreme fear” as of 12 September, a sign that a definite change of trend has yet to be recorded.
“Extreme fear” is where the index spent much of 2022, including its longest consecutive term, lasting more than two months.
For Sentiment, a platform dedicated to the analysis of crypto sentiment, there was reason to be cautious, thanks to profit-taking activity on both bitcoin and ether.
“Bitcoin climbs above $22k today for the first time in 3 weeks,” it Abbreviation,
“BTC’s ratio of trading in profit versus loss is at its highest level since March, and it appears that many have seen this mild bounce as a trigger to trade again.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
