Bitcoin defends the area around $52,000 and bounces above $55,000 after a weak weekend for cryptocurrencies. The largest cryptocurrency follows in the footsteps of U.S. stock indices; it rises in correlation with the Nasdaq 100, falls with gold prices. This week, investors will be watching closely to see if the ECB decision and US CPI data will have some impact on prices, and what assets Wall Street will be betting on, in anticipation of the Fed decision, next week:
- Record outflows from U.S. ETFs reported ($1.2 billion in 8 sessions, up to and including Sept. 6)
- Bianco Research expects long-term, consistently positive impact of ETFs on Bitcoin adoption and cycles
- Despite the outflows, Bitcoin and Ethereum funds have been the most successful ETF newcomers this year (ranked 13 out of the top 25 newcomers; including 4 first positions)
- Lower U.S. bond yields, a weaker dollar and the prospect of a Fed rate cut this month continue to fail to ignite crypto market sentiment
Recent weeks for the cryptocurrency market have been very weak, and while Bitcoin is still 'struggling' many smaller cryptocurrencies have 'returned' to 2023 levels, almost completely erasing nearly a year of better sentiment, supported by the price action of Bitcoin itself. So far, the cryptocurrency is not behaving as a 'safe haven', rather as a global risk barometer, and another sell-off - halted at the $52K level - has set off in the wake of stock market indices. Now investors will turn their attention to whether and how strongly bitcoin will rebound, if sentiment in global markets improves, after the last few down sessions. The low volatility and weakness in BTC could be perceived as a 'silent' risk, still hanging over global risk sentiment.
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Create account Try a demo Download mobile app Download mobile appBitcoin spot ETFs have seen net outflows of more than $1.2 billion over the past eight sessions. Investors realized gains as uncertainty grew over the sustainability of the rebound from the panic of early August. Source: Bloomberg Finance L.P. XTB Research
ETFs trading volumes saw a noticeable decline in the second half of the year. The prospect of rate easing this month does not bring record interest in 'anti-dollar' Bitcoin, despite declining movements in the dollar and falling yields. Source: Bloomberg Finace L.P. XTB Research
Bitcoin chart (H1, D1 interval)
The recent downward impulse stopped at the level of 71.6 Fibonacci retracement of the August 5/6 upward wave. There is still a potential to confirm the 'bull flag' formation if the BTC price rises above $58k where we see significant price reactions and 38.2 Fibo.
Source: xStation5
A potential 'bullish' flag on the Bitcoin chart is also visible in the broader daily interval. A breakout above $62,000 could potentially open the cryptocurrency's way to new one-year highs. Declines have been halted three times at the 38.2 Fibonacci retracement zone of the 2023 upward wave; the discount to the 200-session SMA200 (red line) remains at a record high since 2022 and currently stands at nearly 15%.
Source: xStation5
Since about June, bitcoin has ceased to correlate with gold, which continues its rally unleashed by weaker US macro data and smoldering geopolitical tensions in the background. Dollar weakness has not supported BTC in the short term. Investors looking for 'safe haven' assets chose 'more secure' gold?
Source: xStation5
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