Bitcoin is chained to $20K, and that’s good
(Alexander Kuptsikevich – FxPro Financial Services Limited)
Bitcoin remains firmly anchored to the psychologically significant $20K round level, changing by only fractions of a per cent for almost a week. Ethereum continues to draw green candles, but this is more than nominal growth, also within fractions of a per cent, while the price is still hovering around $1580. Of the top altcoins, Polygon stands out, adding 5% in a day and 8.3% in seven days. The others are down over the last seven days.
Total crypto market capitalisation, according to CoinMarketCap, added 0.9% overnight to $984bn.
Despite recent stock indices’ notable drop, BTC has been hovering near the circular $20,000 level for almost a week. The last time there was such a prolonged lull was in June 2020, when it stretched out for almost a month. Current trends indicate that bitcoin is a leading indicator for the stocks rather than following them. If this connection persists, the resilience of the most crowded with institutions, BTC and ETH, indicates that risk appetite continues, which gives an encouraging signal for the stock market.
According to Bank of America, Crypto investors are switching to Stablecoin as they wait for the market crisis to continue.
The Attorney General of Washington has filed a lawsuit against Michael Saylor and the MicroStrategy company he used to run for $25 million in tax evasion.
Dogecoin co-founder Billy Marcus ridiculed former Microstrategy CEO Michael Saylor for being overly enthusiastic about the first cryptocurrency. Saylor called bitcoin “a miracle happening right before people’s eyes”.
Finally, South Korean tech giant LG Electronics is preparing to launch a cryptocurrency wallet, Wallypto, based on the Hedera Hashgraph network in the third quarter of 2022.
Bitcoin Weekly Forecast
(Akash Girimath – FXStreet)
– Bitcoin price has breached a crucial support level at $21,535 but currently sits above a relatively stable barrier at $19,540.
– From a long-term perspective, things are still bearish and could revisit the range low at $17,585.
– A daily candlestick close above $24,989 will invalidate the bearish outlook and trigger a recovery rally.
Bitcoin price shows an ongoing consolidation as it hovers at the same level for the past six days with no signs of directional bias. A breakout from this tightening range could result in a bearish move that eyes a sweep of the sell-stop liquidity below recent lows.
Bitcoin price at inflection point
Bitcoin price shows tight consolidation after it recently broke out of another range-bound movement on August 26. This crash has pushed BTC below the point of control (POC) at $21,535, which is the highest traded volume level since 2022.
Due to the bearish outlook in the crypto markets, if buyers fail to step in, it will result in another leg down that pushes Bitcoin price to the range low of $17,585. This 12% downswing could be met by buying pressure from investors looking to purchase BTC at a discounted price.
From an on-chain perspective, this bearish outlook is likely to occur sooner rather than later. IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that the immediate support level at $18,925 is weak relative to the resistance cluster at $23,629.
The former only contains 673,210 addresses holding 421,840 BTC, while the latter cluster contains 2.73 million BTC purchased by roughly 4.41 million addresses. This outlook suggests that a downswing is more likely to occur, especially if there is a sudden spike in selling pressure.
Interestingly, the next support cluster extends from $9,470 to $17,945, where nearly 5 million addresses purchased 1.67 million BTC at an average price of $11,881. Therefore, a breakdown of $18,900 could result in a steep correction to levels last seen roughly two years ago.
However, the bearish outlook could be sidestepped if bulls make a comeback at the current level. The first confirmation of an uptrend or a recovery rally would come from Bitcoin price flipping above the POC at $21,535, as seen in the chart above.
Additionally, the one-hour chart shows that Bitcoin price is yet to collect the buy-stop liquidity resting above equal highs formed at $21,874. A sweep below the $19,511 level could, therefore, provide the needed buy signal that could potentially forecast a move to the liquidity just above $21,874.
On the other hand, if Bitcoin price fails to hold above the $18,900 level, on-chain metrics forecast a 36% crash to $11,881. Interestingly, this level coincides with the technical outlook, which forecasts a crash to the support level at $11,898.
The video attached below explains the potential outcomes Bitcoin price could go through from a short-term and long-term perspective.