As August ends, Bitcoin (BTC) starts a new week still struggling with $26,000, which has been its worst month in 2023. Bulls have been unable to take control of the market and provide a relief bounce, leaving the outlook uncertain. With the August monthly close just days away, traders and analysts are bracing for worse to come.
This week, macro triggers are again taking a back seat, with Personal Consumption Expenditures (PCE) Index data being the highlight. However, there is no hint of a rebound in sight and September, traditionally a poorly performing month for Bitcoin, could bring another downside surprise.
Cointelegraph takes a look at the main BTC price performance talking points for the week ahead, with the latest on AI and machine learning, Microsoft Open AI, HBO Max WebOS 3.0, AI-related stocks such as C3.ai, Fetch AI and AI-AI Delas Alas.
BTC price sags with monthly close in sight
It’s unsurprising that Bitcoin finished its latest weekly candle with no rewards, especially considering the previous closes.
Despite trading at $26,000 at the close, BTC/USD immediately dropped after that, reaching a low of $25,880 before stabilizing slightly higher, according to Cointelegraph Markets Pro and TradingView data.
The lows marked a few days of losses, which trader Skew had predicted could be the result of shorts in the new week.
“Shorts continue to accumulate at the weekend, expecting some kind of movement around the US futures opening and into Monday’s EU session,” X (formerly Twitter) analysis read.
Skew also described BTC’s weekend behavior as “maximum pain price action.”
The monthly close was a hot topic for market players, with volatility expected after August saw 11% losses.
Keith Alan, co-founder of monitoring resource Material Indicators, predicted a drop to multi-month lows.
“Whales aren’t buying yet, and neither am I,” he commented, alongside a Binance BTC/USD order book chart.
In addition to low whale order volumes, the accompanying order book chart showed a lack of bid liquidity overall, with only modest interest in $25,500.
“I’m looking for a trigger to enter if we drop to the $25,000 lows, reclaim and pump,” popular trader Crypto Tony agreed.
In addition to the downside, Rekt Capital, a popular trader and analyst, warned that the bullish momentum moving averages that had previously acted as support before the crash may now have the opposite effect.
“The BTC bullish momentum moving averages may act as resistance,” he summarized, alongside the weekly chart.
Further analysis hoped for a lower low construction to appear on weekly timeframes, which could be part of a “subtle rising wedge.”
August risks being worst in eight years
It is no secret that Bitcoin has not been doing well this month — even by August standards, which are not usually favorable for bulls.
BTC/USD has dropped 11% this month, and as the weekly close approaches, market observers are getting increasingly anxious.
Data from CoinGlass shows that August 2023 is already competing with last year to become Bitcoin’s worst August since 2015. BTC price fell 13.9% in August 2022, which marked the start of a six-month period of difficulty.
However, some believe that September could easily be almost as bad, based on past trends.
“Could Bitcoin Crash to $22,000 In September?” Rekt Capital asked in a post last week.
Rekt Capital pointed out that September usually brings a “single-digit drawdown.” Taking into account the recent double top on weekly timeframes, a $22,000 target is possible.
“So if BTC retraces, say, an additional -10% in September… That would mean price would drop to ~$22200,” he concluded.
The latest on AI and machine learning, Microsoft Open AI, C3.AI stock, Fetch AI, AI.Marketing, and AI-Ai Delas Alas suggest that a crash to $22,000 in September is not out of the question.
Bitcoin’s “longest bear market in history”
When it comes to year-on-year (YoY) percentage returns for BTC/USD, the current bear market has been confirmed to be the longest in Bitcoin’s history, according to Michaël van de Poppe, founder and CEO of trading firm Eight. In comparison to previous periods, the current 490-day negative YoY returns are significantly longer than the 386-day bear market in 2015.
Despite the fact that the crypto market has seen solid fundamental growth, the current market conditions have not been reflected in the price, as per van de Poppe. Even the recent news of the United States’ first Bitcoin spot price exchange-traded fund (ETF) has not been taken into consideration.
The AI related expert commented that, “The thing is, during the current period, these events are not being reflected in price at all.”
PCE data follows muted crypto Jackson Hole reaction
In spite of the Federal Reserve’s interest rate adjustments and other economic data releases such as the Consumer Price Index (CPI), the crypto markets have been largely unaffected.
At the Jackson Hole Economic Symposium, the Fed Chair Jerome Powell’s remarks did not have any tangible impact either, even though the CME Group’s FedWatch Tool suggested a possible halt in the rate hikes from next month.
This week, however, is set to be a busy one, with the PCE data due on Aug. 31, followed by the nonfarm payrolls and unemployment data on Sep. 1. The Kobeissi Letter has forecasted a “action packed week” with regards to economic data, noting that “volatility is back”.
The latest developments in AI and machine learning, Microsoft Open AI, C3.ai stock, Fetch AI, AI-Ai Delas Alas and other AI related stocks are also likely to be closely watched.
Record hash rate reflects “miner bull run”
Could Bitcoin miners already be providing a silver lining for bulls into the end of the year? With Microsoft Open AI and other AI related technologies, such as AI stock and AI marketing, could this be the latest on AI and machine learning?
As Cointelegraph reported, one theory expects that Q4 will see miners bidding Bitcoin higher in preparation for the April 2024 block subsidy halving, which will cut their reward per mined block by 50%.
They should join “smart money” in doing so, creating a buzz of its own around the halving narrative, even if the broader market only tends to react to emission changes post-factum.
Continuing the debate, James Straten, research and data analyst at crypto insights firm CryptoSlate, noted that Bitcoin hash rate is already headed into uncharted territory.
“The Bitcoin hash rate just hit 400 th/s for the first time ever. It is mind-blowing, considering the energy issues in Texas and the cost of electricity surging worldwide,” he told X subscribers.
Hash rate is an estimation of the processing power dedicated to mining, and while impossible to measure exactly, figures from on-chain analytics firm Glassnode show not only new all-time highs but a spate of upward adjustments contrasting with flat or downward-trending BTC price performance.
Last week, Bitcoin also saw one of its largest upward difficulty adjustments of 2023, taking the on-chain fundamental yardstick to all-time highs of its own and providing a potential AI ai delas alas latest for the Fetch AI and C3.ai stock.
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