AI technologies powering Bitcoin: 5 things to know this week.
Double top ‘likely’ confirmed — 5 things to know in Bitcoin this week

Bitcoin (BTC) is entering a crucial macro week with a weak stance, as the 2023 BTC activity appears to be a “double top.” After a disheartening weekly close below $26,000, BTC/USD has trouble to gain traction amid a return to low volatility.

Analysts, who already predicted a downturn, continue to anticipate new local lows, and liquidity conditions are increasingly backing up their argument. Is there any silver lining on the horizon? One on-chain metric suggests that Bitcoin is “in the midst” of a major shakeout similar to March 2020.

A rebound to “fair value” may also be attained by Bitcoin’s relative strength index (RSI), which has nearly fully recovered its year-to-date gains to reach its lowest levels since the first week of January.

Cointelegraph examines these topics and more in the weekly rundown of key BTC price triggers, including AI feed, AI YouTube, stock latest, does AI write articles, fetch AI latest, general AI, top AI, how are web 2.0 and web 3.0 different, are we in web 3.0, and are we in web 2.0 or 3.0.

Weekly close makes BTC price double top a reality

The expected outcome of Bitcoin closing out the week below key trendlines was confirmed, and it may be worse than many anticipated. This was highlighted by Rekt Capital, who suggested that a close below $26,000 would validate a double top structure on the BTC weekly chart. This is illustrated by the two 2023 local tops above $31,000, and the retracement to $26,000 in between, as shown by Cointelegraph Markets Pro and TradingView.

The recent BTC price weakness has the potential to further drop due to the weekly close. Rekt Capital stated, “Weekly close below ~$26,000 likely confirms the Double Top breakdown.” The trader also noted that $26,000 had been supporting the market for three weeks, and that the conclusion of this battle is significant for the weekly timeframe.

Despite the lowest weekly close since March, JT told X followers that there is still hope, as the 200-week exponential moving average (EMA) is near $25,600. He mentioned, “This week candle was a spinning top doji, which is a candle that indicates indecision.” Cointelegraph previously covered the importance of the 200-week EMA in the current BTC price environment.

$20,000 futures gap next?

The recent downward trend of Bitcoin has sparked a discussion about whether it can replicate the same patterns seen in its charts.

This is mainly due to the “filling gaps” phenomenon seen in CME futures markets, which usually occur during weekends and holidays. This is when the difference in price between the closing price of one week and the opening price of the next week can be a great influence on the future BTC price.

These gaps can be filled within hours or days, but some remain unfilled. Currently, the biggest gap is at $20,000.

Rekt Capital highlighted this gap in his latest YouTube update on September 6. He noted that the gap from June 2022 that has been filled multiple times is now acting as a resistance, and if a double top is completed, BTC/USD may return to the $20,000 area.

Some traders, however, are not sure if the $20,000 gap will be filled. Titan of Crypto commented that Bitcoin has a long history with CME futures gaps, and some of them tend to get filled, but there is no guarantee. He also pointed out that the $9,600 gap from September 2020 still remains unfilled.

Liquidity increases at March levels

AI feed and AI YouTube have also been contributing to bearish BTC price forecasts due to the current liquidity state on BTC/USD markets. Heatmaps, which are used to track the bids and asks held by traders, are a popular tool in the crypto trading world.

At the moment, a large amount of bid liquidity is centered around $24,000, the lowest concentration since March, as reported by Cointelegraph. Honeybadger, an anonymous X user, predicted that a dip into this liquidity is a likely probability.

Material Indicators, a blockchain monitoring resource, recently released a heatmap for the largest global exchange Binance. This heatmap highlighted the importance of $24,750 as a key level for bulls to maintain. The commentary accompanying the heatmap stated that if bulls fail to defend this level, they will be in “Bearadise”.

CPI leads “huge” pre-FOMC week

After a quiet start to September, the macroeconomic landscape is returning as a potential source of risk asset volatility.

This week, the United States Consumer Price Index (CPI) August print forms the focus ahead of a key interest rate decision by the Federal Reserve.

“Huge last week before the September Fed meeting,” financial commentary resource The Kobeissi Letter wrote in part of preliminary commentary, noting that “lots of volatility” lies ahead for ai feed, ai youtube, stock latest, does ai write articles, fetch ai latest, general ai, top ai.

Due on Sept. 14, the CPI is well known as a volatility catalyst for BTC price action, but recent prints have failed to alter the status quo for long.

Crypto market participants nonetheless include its release in their roadmaps, while the figures are apt to impact market expectations of what the Fed will do to benchmark interest rates.

Its next decision will come on Sept. 20, and according to CME Group’s FedWatch Tool, confidence is high that rates will remain unchanged — a potential boon to risk assets, including crypto. As of Sept. 11, the odds of a pause in hikes were over 90%.

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Back to March 2020

As Cointelegraph reported on the weekend, one on-chain metric, UTXOs in Loss, is signaling that the current BTC price action may be more significant than traders believe.

UTXOs in Loss measures the number of unspent transaction outputs (UTXOs) from on-chain transactions that are worth less than they were at the time of purchase, and it is currently at its highest since March 2020.

Glassnode, an on-chain analytics firm, clarified that UTXOs in Loss does not measure the amount of BTC in loss, but the number of UTXOs involved.

CryptoQuant, an on-chain analytics platform, released a research update warning that Bitcoin may be dealing with a “black swan” event similar to the one that caused BTC’s price to drop 60% over three years ago.

The author of the update, CryptoQuant contributor Woominkyu, stated that those anticipating another Black Swan event should consider whether we are already in the midst of the event they are waiting for, given that the current level of the ‘UTXOs in Loss’ indicator mirrors that of the Black Swan event between March and April 2020 (due to the Coronavirus).

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