As a seasoned researcher and analyst with over a decade of experience in the cryptocurrency market, I find myself both intrigued and cautious about the current state of Bitcoin (BTC). The bearish outlook that has persisted since mid-March, despite positive fundamental aspects, is a phenomenon I’ve witnessed before. However, the recent drop in investor demand as indicated by the Exchange Volume Momentum and the Fear & Greed index, coupled with the liquidation of over $152 million from crypto leveraged traders, presents a unique challenge.
Following a pessimistic finish in August, Bitcoin (BTC) began September on unstable footing as investor anxiety over additional price drops grew. Last week, the leading cryptocurrency dropped by approximately 9%, causing it to end the month below the critical support level of $58K-$60K. Based on recent crypto market statistics, Bitcoin’s price closed below $58k yesterday, suggesting a continued bearish trend for September.
Furthermore, it’s worth noting that the value of Bitcoin has typically dipped during the month of September, more so after the halving event, according to historical records.
In the wake of increased bearish turbulence in Bitcoin’s market, I observed a ripple effect on the altcoin sector as well. This resulted in a staggering $152 million worth of positions being liquidated from crypto leverage traders.
Bitcoin Suffers Low Investor Demand
Since mid-March, the price of Bitcoin has found itself stuck within a bearish correction phase, yet there’s been significant enhancement in its underlying factors. Some experts interpret this as the formation of a bullish flag pattern, which usually signals a continuation of the existing trend. However, an examination of on-chain data indicates that investors have been exiting the market.
The Fear and Greed Index for Bitcoin has dipped to 26%, reflecting a high level of investor fear, since the BTC price fell below $58,000.
Based on findings from Glassnode’s market data analysis, it seems that the Exchange Volume Momentum indicator points towards a prolonged decrease in transactional activities on exchanges, indicating reduced investor enthusiasm.
The Exchange Volume Momentum indicator indicates a consistent decrease in Bitcoin trading on exchanges, often signaling reduced investor enthusiasm for Bitcoin and less activity on the Bitcoin network.
— Ali (@ali_charts) September 1, 2024
Currently, U.S. Bitcoin ETFs have experienced substantial losses over the past few days, similar to their counterpart Ethereum ETFs. Last Friday, these Bitcoin ETFs recorded an outflow of approximately $175.67 million in net cash and traded a total volume of around $1.54 billion.
In simpler terms, large amounts of money flowing out from ARK 21Shares Bitcoin ETF (ARKB) and Grayscale’s GBTC in recent times have greatly influenced the overall negative trend in the market. Also, BlackRock’s IBIT saw no inflow or outflow of funds on Friday.
Crucial Midterm Targets
Currently, it’s important to note that the amount of Bitcoin held on centralized cryptocurrency exchanges is at its lowest in years. This might signal an end to the bearish trend for Bitcoin, particularly as the US economy undergoes a significant shift.
This month, it’s likely that the U.S. Federal Reserve will kick off the long-awaited reductions in interest rates. These cuts are often referred to as the ‘easy money’ phase. However, some financial analysts predict that these anticipated rate cuts in America could lead to a ‘sell-the-news’ scenario in the coming weeks.
$BTC is still Moving within a Bullish flag Pattern.
It may test the 54k Support Area again, and it’s crucial for the Bulls to defend this level.
Should Bitcoin rebound from its current support at approximately $54,000, there’s a potential for it to surge as high as $68,000 by the end of September. #Cryptocurrency #Bitcoin #BTC
— Captain Faibik 🐺 (@CryptoFaibik) September 2, 2024
Looking at its technical aspects, the value of Bitcoin might decrease further over the next few days, potentially dropping back to around $54K as a support level. However, analysts predict a recovery in the last three months of this year and the first half of 2025, which could make this crypto bull market similar to the one experienced in 2017.
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2024-09-02 11:19