Fun

More ‘extreme fear’ than FTX crash — 5 things to know in Bitcoin this week

News Feed - 2024-08-12 06:08:15

William Suberg14 hours agoMore ‘extreme fear’ than FTX crash — 5 things to know in Bitcoin this weekBitcoin market sentiment is as erratic as BTC price action itself as a week of macro volatility catalysts gets underway.6837 Total views26 Total sharesListen to article 0:00Markets NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onBitcoin continues a wild August with more volatility as the week opens with a dip below $60,000.


After a spectacular reclaim of the ground lost after an equally spectacular collapse to six-month lows, Bitcoin (BTC) price action is fighting to restore its bullish narrative.


Who will take control in the coming days?


The stage is already set for the ongoing battle between bulls and bears, but plenty of volatility catalysts are waiting to provide some surprises.


Chief among them comes from outside the cryptosphere in the form of macroeconomic data from the United States.


The July print of the Consumer Price Index (CPI) is top on analysts’ radar amid controversy over how the Federal Reserve is handling global market instability.


Due on Aug. 14, CPI will come a day after the Producer Price Index (PPI), while jobless claims will round out the week.


For traders, meanwhile, a double “death cross” on BTC/USD provides a grim reminder of how even bull markets can have their ugly moments.


Bitcoin network fundamentals are also reacting to recent market turmoil, with mining difficulty set for its first drop in six weeks.


With Bitcoin and altcoins in a state of flux, Cointelegraph takes a closer look at the key factors currently influencing the market.BTC price action “all over the place”


After a flat weekend, Bitcoin upped the volatility into the weekly close, with last-minute downside attributed to manipulatory actions by large-volume traders.BTC/USD 1-week chart. Source: TradingView


The close itself thus came in at just above $58,700, per data from Cointelegraph Markets Pro and TradingView, marking only a slight rebound versus the $10,000 losses from two weeks prior.


The Aug. 12 Asia trading session continued the volatile theme, with local lows of $57,700 appearing on Bitstamp.


“Lower timeframes are all over the place, but the weekly chart tells a different story,” popular trader Jelle responded on X.“165 days of mid-cycle consolidation. This cycle ain"t over.”


“We went a little higher than expected but 55k support retest is next. Will look for a long setup in that area,” fellow trader Roman told X followers in part of his latest market coverage.


Credible Crypto noted that bid liquidity on exchange order books currently stood slightly higher than “untapped lows” near the $55,000 zone.


“Lots of people watching the green long zone between 54.5-56.5k as we have local demand there and equal, untapped lows,” he wrote in part of an X post alongside an explanatory chart.“That being said heatmaps are showing stacked bids right above that region- front running the ‘ideal’ long zone.”BTC/USDT chart with liquidity for Binance. Source: Credible Crypto


Credible Crypto acknowledged a reset of open interest into the weekly close drawdown.


“Would not surprise me if we front run the 54.5-56.5k zone and reverse before that,” he concluded.BTC liquidation heatmap (screenshot). Source: CoinGlass


The latest data from monitoring resource CoinGlass meanwhile showed buyer liquidity appearing at $57,700 and lower on Aug. 12. Heavy ask ladders remained overhead, focused on $61,000.Bitcoin bulls battle two death crosses


Bitcoin has managed to cement two separate “death crosses” over the past week, a problematic situation that has not gone unnoticed by the trading community.


As Cointelegraph reported, these involve four trendlines: the 21, 50, 100 and 200-day simple moving averages (SMAs).


In recent days, the downward-sloping 21-day SMA has crossed below the 100-day equivalent — a move then repeated by the 50-day and 200-day pair.


“Bitcoin Bulls were not able to avoid the second Death Cross,” Keith Alan, co-founder of trading resource Material Indicators, confirmed in X commentary on Aug. 11 while uploading a snippet of video analysis.


In this, Alan nonetheless described the death crosses as “not the be all and end all” for the market, with bullish volatility still able to cancel out the consequences.


“Again, they’re lagging indicators, so you have to wait and see,” he said.


Earlier, popular trader Benjamin Cowen argued that a daily close above $62,000 would be necessary to avoid further death cross problems going forward.BTC/USD 1-day chart with 50, 200 SMA. Source: TradingViewCPI week arrives as VIX volatility stays unsettled


This week’s CPI and PPI prints could arguably not come at a worse time for risk asset traders.


Any surprises will add to a complex picture of US inflation, with the Fed already under pressure to lower interest rates at its next meeting in September.


Last week’s turmoil, centered on Japan, only increased the onus on the Fed to respond, but so far, the status quo remains the same — the highest rates in more than twenty years.


“We have a busy week ahead,” trading resource The Kobeissi Letter summarized in one of its latest X threads.


Kobeissi noted that the VIX volatility index remains elevated after hitting its third-highest levels in history last week.


However, CPI itself is forecast to continue falling, which should empower the Fed to consider the all-important rate cut.


Charlie Billelo, chief market strategist at wealth management firm Creative Planning, focused on fuel as a potential contributing factor to the Fed’s dovish stance.


“Gas prices in the US have moved down to $3.45 per gallon (national average) from $3.82/gallon a year ago (10% decline),” he noted last week.“If this holds, will likely be a factor in pushing down headline CPI for August (Cleveland Fed is currently forecasting 2.7%), solidifying the Fed"s rate cut.”Fed target rate probabilities. Source: CME Group


The latest data from CME Group’s FedWatch Tool showed markets pricing in near equal chances of a 0.25% and 0.5% cut in September as of Aug. 12. At the height of the volatility around Japan, the odds heavily favored the latter.Mining difficulty due a modest retracement


It is now time for Bitcoin network fundamentals to respond to the past two weeks’ market mayhem.


In that time, six-month lows for BTC/USD have transformed into a retest of $63,000, with the pair now somewhere in between.


Accordingly, mining difficulty is expected to deliver a modest decrease at its next automated readjustment on Aug. 14. Estimates from monitoring resource BTC.com put this at around 3.5% at the time of writing.


This will be the first difficulty drop in six weeks, yet somewhat average for 2024, which has seen several downticks of over 5%.Bitcoin network fundamentals overview (screenshot). Source: BTC.co


Hashrate, meanwhile, continues to circle record highs, raw data from MiningPoolStats confirms. This underscores an increasingly resilient mining sector already getting to grips with the post-halving landscape.Bitcoin hashrate raw data (screenshot). Source: MiningPoolStats


Analyzing US mining firm data, Ki Young Ju, CEO of crypto analytics platform CryptoQuant, highlighted the average cost of mining 1 BTC still being around $15,000 lower than current spot price.


“US mining companies’ average mining cost per Bitcoin is around $43K. Marathon Digital’s Q2 2024 report shows an average mining cost of $42,969 per BTC,” he noted last week.“This can be calculated using their operational hash rate, cost per petahash per day, and average daily Bitcoin mined.”Crypto embraces multi-year sentiment lows


As crypto markets present a state of flux, so too does the mood among traders.


Related: Bitcoin price drops below $59K as institutions stop buying stablecoins


The latest figures from the Crypto Fear & Greed Index make for unusual reading, with large swings echoing the fickle nature of market sentiment.


On Aug. 6, Fear & Greed hit lows of 17/100 — marking its deepest level since July 2022 and even surpassing the reaction to the FTX meltdown at the end of that year.Crypto Fear & Greed Index (screenshot). Source: Alternative.me


The subsequent BTC price rebound shifted sentiment from “extreme fear” to neutral in days, hitting 48/100 before reversing down once again.


Thus, as of Aug. 12, crypto is back in “extreme fear” despite the absence of a corresponding price downturn.Crypto Fear & Greed Index (screenshot). Source: Alternative.me


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Bitcoin Price# MarketsAdd reaction

News Feed

The Genesis of BCH Tokenization: Over 10,000 SLP Tokens Built on Bitcoin Cash
The Genesis of BCH Tokenization: Over 10,000 SLP Tokens Built on Bitcoin CashThis week Bitcoin Cash fans have been discussing the milestone of over 10,000 Simple Ledger Protocol (SL
Biggest Movers: XRP Hits 4-Month High, ALGO up 17% on Thursday
Biggest Movers: XRP Hits 4-Month High, ALGO up 17% on Thursday XRP moved to a fresh four-month high on Thursday, which comes as volatility in the crypto markets eased, following th
EverLend, First Lending Protocol on Everscale Network, Kicks off Operations With Successful LEND Token Launch
EverLend, First Lending Protocol on Everscale Network, Kicks off Operations With Successful LEND Token Launch sponsored EverLend.appis a secured lending protocol powered by Everscal
Crypto Markets Surge, ETH Price Rallies, Bitcoin’s Tight Range Indicates Big Move Ahead
Crypto Markets Surge, ETH Price Rallies, Bitcoin"s Tight Range Indicates Big Move Ahead Digital currency markets have been on the move northbound on Wednesday as
Hungary’s Prime Minister Says ‘Europe Has Run out of Energy’ Amid Russia’s Gas Standoff
Hungary’s Prime Minister Says ‘Europe Has Run out of Energy’ Amid Russia’s Gas Standoff Europe is suffering and struggling to contain an energy crisis according to various
Defi Protocol Founder Tricked, Hacked for $8 Million in Personal Funds
Defi Protocol Founder Tricked, Hacked for $8 Million in Personal Funds Nexus Mutual founder and chief executive officer Hugh Karp’s personal wallet address
Bitdeer is among the most ‘cost-effective’ Bitcoin miners: Benchmark
Tom Mitchelhill3 hours agoBitdeer is among the most ‘cost-effective’ Bitcoin miners: BenchmarkBenchmark analyst Mark Palmer initiated coverage of Bitdeer on Thursday, issuing the miner with a “buy” rating and set
Digital Currency Group objects to subsidiary Genesis’ settlement with NYAG
Derek Andersen4 hours agoDigital Currency Group objects to subsidiary Genesis’ settlement with NYAGDCG claims the settlement was made with the assumption that NYAG would win in court, and it does not observe the parent
Major Producer Nornickel Issues Its First Metal Contract-Backed Digital Coins
Major Producer Nornickel Issues Its First Metal Contract-Backed Digital Coins One of the world’s biggest palladium producers, based in Russia, announced th
Craig Wright Submits List of Bitcoin Addresses to the Court – Roster Contains Spent Blocks
Craig Wright Submits List of Bitcoin Addresses to the Court - Roster Contains Spent BlocksOn May 21, 2020, the infamous Craig Wright, the man who claims to be Satoshi Nakamoto, subm
Binance Launches Billion-Dollar Crypto Industry Recovery Fund to Restore Confidence After FTX Meltdown
Binance Launches Billion-Dollar Crypto Industry Recovery Fund to Restore Confidence After FTX Meltdown Binance has committed $1 billion to a crypto industry recovery initiative to
EU Bans High-Value Crypto Services to Russia in New Round of Sanctions
EU Bans High-Value Crypto Services to Russia in New Round of Sanctions European institutions are closing crypto loopholes for Russia with the latest package of penalties imposed by