Image of FOMC versus BTC price 'local bottom' and 5 things to know in Bitcoin this week, including differences between web 1.0, 2.0, 3.0 and 4.0 and description of web 3.0 and the next generation of online business.
FOMC versus BTC price ‘local bottom’ — 5 things to know in Bitcoin this week

Bitcoin (BTC) starts the week with optimism as traders welcome the first green weekly candle in more than a month.

The BTC/USD price appears to be gradually improving after a weak August and the start of September, with the pair climbing towards $27,000.

An encouraging weekly close sets the scene for what is likely to be an exciting few days, which includes the U.S. Federal Reserve’s decision on interest rate policy, which could have a significant impact on risk assets, including cryptocurrency.

At the same time, Bitcoin’s network fundamentals are on the rise, with new records being set. This strength is also reflected in hodler behavior, with wallet numbers continuing to rise regardless of BTC price action.

Cointelegraph examines these topics and more as Bitcoin begins what is likely its most eagerly-awaited week of September, which could offer insights into the differences between web 1.0, web 2.0, web 3.0 and the next generation of online business.

Trader eyes BTC price “local bottom”

Bitcoin remained relatively stable over the weekend, however, the new week has already seen a shift in trading conditions, according to data from Cointelegraph Markets Pro and TradingView.

The weekly close on Sept. 17 was followed by a surge of bullish activity, and at the time of writing, bulls are attempting to reach new month-to-date highs.

Credible Crypto, a popular trader, thus suggested that the weekend could form a “local bottom.”

“This region continues to be defended, with buyers stepping in here once again. It looks like a local bottom/base is forming,” he said in an X post, alongside a chart of order book liquidity on the largest global exchange, Binance.

A prior comment noted the lack of potential in shorting at the weekend levels, with bid liquidity increasing.

The weekly close was welcomed by Michaël van de Poppe, founder and CEO of trading firm Eight, who saw key support at the 200-week exponential moving average (EMA).

“Bitcoin is closing above the 200-Week EMA, which is essential for a bullish continuation,” he explained.

Van de Poppe shared a chart showing the interplay between the spot price and the 200-week EMA, currently at $25,700, since 2020.

“Markets are consolidating with a weekly close strongly above the 200-Week EMA for Bitcoin. The chances of the correction ending are increasing day by day,” he added in a separate X post.

Some are remaining cautious in their outlook for Bitcoin into 2024. One of them is Rekt Capital, a popular trader and analyst, who is still monitoring the potential for a bearish double-top pattern to form on weekly timeframes.

“Make no mistake – Bitcoin is in an early stage Bull Market,” he wrote in a recent X analysis.

FOMC volatility expected with near-certainty of no rate hike

This week, the Federal Open Market Committee (FOMC) will meet to decide on interest rates, and the impact on risk assets, including Bitcoin and crypto, could be significant.

The latest macro data has shown inflation beating expectations, yet markets are almost unanimously expecting the Fed to not raise rates.

According to the CME Group’s FedWatch Tool, the odds of rates remaining unchanged are nearly 100%.

The Kobeissi Letter noted that this FOMC decision will set the tone for the rest of 2023, and that volatility should be expected.

Ecoinometrics explained that the market odds were unsurprising based on Fed signals, and that there will be no rate hike at the FOMC meeting on September 20.

The accompanying chart showed that the market “never had doubts” about the outcome of the September meeting.

Difficulty, hash rate hit new records

Bitcoin is back in the “up only” mode of fundamental growth for the upcoming week.

The last automated readjustment of mining difficulty two weeks ago saw a 2.65% dip, which will be reversed on Sept. 19.

According to BTC.com, the difficulty is set to rise by 4.6%, reaching a new all-time high.

Hash rate, which is the estimated processing power used by miners, is also at a record high in 2023, despite a few dips in the spot price.

A massive spike in hash rate has been observed this week, sparking optimism among commentators.

“The bitcoin network hashrate is at an all time high,” said Nicholas Cary, co-founder of Bitcoin data resource Blockchain.com.

Blockchain.com estimated the hash rate to be 422 exahashes per second (EH/s) on Sept. 17, while BTC.com currently puts the figure at 430 EH/s.

Bitcoin address numbers reach multiyear highs

Mining Bitcoin is unstoppable, and the same can be said for its user base, which continues to grow. According to Glassnode’s address tracking metric, the number of new BTC wallets is now at its highest since late 2017, when Bitcoin had its previous all-time high of $20,000. Even the recent $69,000 peak did not result in as much of a surge in new address creation.

Active addresses, however, have returned to their mid-2021 levels this month. Andre Dragosch, head of research at crypto investment firm Deutsche Digital Assets, uploaded the data to X and questioned if BTC price performance would follow the same trend as the Glassnode metrics.

James Straten, research and data analyst at crypto insights firm CryptoSlate, noted that the Glassnode data also showed an all-time high in addresses with 0.01 Bitcoin or less.

The development of Web 3.0, also known as the Metaverse, is expected to bring the next generation of online business. It is anticipated to be a major upgrade from Web 1.0 and Web 2.0, with more interactive features, increased security and improved user experience.

Crypto fear is never far away

Although the Bitcoin ecosystem is showing signs of improvement, the average crypto investor is still hesitant to trust the market. According to the latest data from the Crypto Fear & Greed Index, the sentiment in the crypto space remains “fearful”, with the Index hovering just below the “neutral” 50 mark.

Fear has been the prevailing emotion since mid-August, with market movements playing a key role. Analyzing the net unrealized profit and loss data of BTC, popular trader and analyst Titan of Crypto noticed a “striking correlation” between the current market environment and the lead up to the previous Bitcoin bull runs.

“I think we might witness a similar price action as Bitcoin had in the first 2 cycles,” Titan of Crypto commented, referring to the difference between web 1.0, 2.0, 3.0 and 4.0.

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