What to Expect from Bitcoin This Week

Specialists RBC Crypto analyzed the market situation and assessed the prospects for the Bitcoin exchange rate movement over the next seven days.

“The technical picture remains favorable”

BitRiver financial analyst Vladislav Antonov

Bitcoin has shown strong growth over the past week, trading in a range of $54,379 to $60,625. Since the beginning of the week, the main cryptocurrency has risen in price by 9.23%, reaching $59,960 by the end of the week. Ethreum (ETH) has also shown positive dynamics, adding 5.20% and consolidating at $2,416.

The week began with a rebound in Bitcoin after breaking the trendline at $55,800, helped by a rally in stock indices, especially tech stocks. However, institutional demand for Bitcoin was declining, with US spot Bitcoin ETFs recording a net outflow of $706.1 million, and the number of daily active addresses falling from 726,380 to 597,560.

The middle of the week was marked by the publication of US inflation data, which had a significant impact on the market. Annual inflation fell to 2.5%, which was the lowest figure since February 2021. This increased expectations for a possible Fed rate cut at the upcoming meeting on September 18. After the initial decline, markets began to rise, and traders became more confident about the likelihood of a 25 basis point rate cut.

Bitcoin posted a strong 4.07% gain to $60,498 on Friday, September 13, as stock indices rose and the dollar index fell. Investors began to return to stocks, particularly in the tech sector, amid growing expectations of a major rate cut by the Federal Reserve. The probability of a half-point rate cut has risen to 50% from 30% a week earlier. Comments by former New York Fed President Bill Dudley on the need for a deeper rate cut also added to the positive sentiment. A decline in 10-year Treasury yields further supported the U.S. stock market.

On Saturday, September 14, Bitcoin was trading at $59,962, approaching the important resistance of $61,450 (trend line from $70,079). According to BitRiver estimates, the technical picture remains favorable for continued growth, but buyers need to overcome the $61,500 and $65,000 levels to consolidate the reversal pattern on the daily and weekly timeframes. It is also important to hold the support at $57,300. These targets must be achieved before September 26, after which a decline phase may begin, which may scare novice investors with a possible collapse of the crypto market.

The key event this week will be the US Federal Reserve meeting and Jerome Powell’s press conference. The market has already priced in a 25 basis point rate cut, so the main focus will be on the Fed chairman’s rhetoric regarding further monetary policy plans for the rest of the year.

“There is a lack of a positive agenda”

Co-founder of the ENCRY Foundation Roman Nekrasov

Bitcoin closed the week on a positive note. Having opened the second week of September at a level below $55,000, BTC gradually grew and exceeded $60,000 over the weekend. Thus, Bitcoin rose by 10% over the week, almost completely recouping the decline since the beginning of September.

But other cryptocurrencies, although they have started to grow, are not yet showing such a confident trend. Ethereum continues to trade below $2,500, having added only 5% over the week. Solana (SOL) has risen in price by 6%. Among the favorites of the week, we can note Toncoin (TON), but it also showed high growth rates against a low base, while in absolute terms, TON is still trading well below the level at which it was before Pavel Durov was detained in France.

Bitcoin is increasing its market dominance: it now accounts for over 56% of the total crypto market capitalization. The growth of this indicator indicates that investors consider the situation to be extremely unstable and therefore prefer to transfer capital to the most stable asset on the crypto market — Bitcoin.

This assumption is supported by the low level of the Fear and Greed Index, which remains in the fear zone with rare transitions to the neutral zone. The level of greed or extreme greed that usually accompanies the dominance of bulls in the crypto market is still out of the question.

The main driver of moderate optimism last week, which returned Bitcoin to $60 thousand, can be considered the anticipation of a reduction in the key rate at the upcoming meeting of the US Federal Reserve. After the publication of data on consumer price growth, investors’ confidence that the regulator will decide to begin easing monetary policy only strengthened.

US consumer price growth has slowed to 2.5% year-on-year, down from 2.9% a month ago. Overall, this decline was expected: Fed Chairman Jerome Powell recently spoke about inflation gradually approaching the target of 2%. But another confirmation of the upcoming reduction in the key rate always has a positive effect on the market.

But there is a nuance in this “barrel of honey”: monthly core inflation (Core CPI index) in the US accelerated from 0.2% in July to 0.3% in August. Therefore, market participants have abandoned hopes that the Fed will lower the rate by 50 percentage points at once – the probability of this is significantly lower than a reduction of 25 percentage points.

This week, the main event that will influence the situation on the market will certainly be the US Federal Reserve meeting on September 18. With expectations of a rate cut, Bitcoin may overcome the resistance in the $62,000 region and test $64,000. But it is unlikely to hold on — investors are too afraid of continuing inflation and there is not enough positive agenda for the crypto industry itself.

Increased volatility can be expected around September 18-19, while the cryptocurrency may reach a local peak on the eve of the publication of the key rate – after all, as is known, the rule “Buy on rumors, sell on news” applies to the crypto market.

Stay up to date! Subscribe to World Stock Market on Telegram.