Bitcoin (BTC) started an important week on solid momentum as the bulls succeeded in pricing.
After closing the latest weekly candle at $21,800, the highest level since mid-August, BTC/USD is back on the radar as a long-term bet.
The end of a prolonged bearish period interspersed with sideways price action has ended one way, with volatility expected to form a major theme in the coming days.
In addition to The merge Ethereum (ETH) on September 15, the U.S. Inflation trend will come under scrutiny on September 13 with the release of Consumer Price Index (CPI) data for September 8.
How the market moves is unpredictable. How will Bitcoin weather volatility? While the macro picture looks opaque for risky assets as the U.S. dollar appreciates, On-Chain Data continues to indicate a price bottom has been formed.
Additionally, Bitcoin is poised to hit new all-time highs this week, underscoring miner resilience and resilience, along with confidence in profitability.
Cointelegraph looks at some of the key areas to watch as Bitcoin gives “Septemberear” a run for its assets.
Weekly closures intensify short-term BTC bets
The latest weekly close has provided some much-needed relief for Bitcoin price speculators.
After weeks of bad performance, BTC/USD finally managed to achieve convincing gains for the week, even avoiding a last-minute correction at the close of the candle, data from Cointelegraph Markets Pro and TradingView showed.
Therefore, the 9/11 event formed a solid foundation for a week due to bringing significant volatility.
At the time of writing, that level is forming a consolidation zone, coinciding with the key trendline in the form of bitcoin’s actual price. According to online chain analytics firm Glassnode, this figure currently costs around $21,770.
Besides, a spike to $22,350 on Bitstamp overnight caught the attention of traders, boosting the price.
“This is only a preliminary supply at 22300,” the popular Twitter account Il Capo of crypto wrote in one of the recent updates.
“Still think there’s a 23k possibility. Then we see the reversal.”
However, another tweet also warned that “major resistance levels” are now in play on Bitcoin and alternative currencies.
“In my view, we will soon see a 5-7% increase in the last turn, then the ltf distribution, then the nuclear. Get ready,”
CPI combined with dollar discounts
BTC price action comes from a familiar source: the U.S. Federal Reserve.
CPI data will be available for May 8 and hope is in a downward inflation trend that continues to show that the peak has formed.
Massive week coming up;
– CPI Data, which will most likely give a direction towards the FED.
– $ETH merge is approaching, which is one of the biggest events in blockchain in the past years.
– Climax on strength of the $DXY potentially approaching.
Fire.
— Michaël van de Poppe (@CryptoMichNL) September 12, 2022
If that’s the case, it would be a boon for risky assets that are being hit hard ahead of a strong U.S. dollar.
According to CME Group’s FedWatch Tool, the Fed’s Federal Open Market Committee is still likely to issue a repeat 75 basis point rate hike at its September meeting next week.
However, dollar watchers have reason to believe that the return on risky assets will strengthen itself in the coming days.
The U.S. Dollar Index (DXY), fresh from a twenty-year high, fell nearly 2.7% in just four days.
My calculator cannot count the number of negative comments I received after tweeting the $DXY Sell Signal. https://t.co/ENGqkgkb1v pic.twitter.com/r4VlfIVvSR
— Trader_J (@Trader_Jibon) September 12, 2022
Analyst Mark Cullen, the creator of trading resource AlphaBTC, revealed: “One thing that makes me doubt the negative trend of Bitcoin and cryptocurrencies in general after the merger of ETH, is DXY.
“We see the potential for 3 divergence dynamics to form on the RSI and the September FOMC is next Wednesday. I wonder if we see $DXY breaking the parabolic line and pushing the risky asset up. ”
Meanwhile, Phoenix Copper CEO Donald Pond called the USD and DXY charts “the most important charts out there.” “The dollar is too strong and has killed everything else,” he tweeted that day.
“It has fallen rapidly over the past few days, but is still in a strong uptrend. There is no sustained recovery for the markets until the trend is broken. ”
The Merge comes close
The addition of inflation data is an internal price trigger – Ethereum Merge will launch around September 15.
Hype has been built on social media, and now, analysts are wondering what the immediate consequences will be — namely, whether investors will “sell the news” and take the market lower immediately after The Merge is complete.
Huge week for the #Ethereum and #Crypto community with the upcoming Merge
These events tend to create more liquidity, which can be used to the whales advantage via engineering certain moves and looks
Do not rush into positions if your not already in one ‼️
— Crypto Tony (@CryptoTony__) September 12, 2022
everyone larping about if they should long the merge or short the merge
feels like one of these games where the best move is not to play
— Udi Wertheimer (@udiWertheimer) September 12, 2022
In an update released on September 10, trading platform Decentrader emphasized the need for caution.
“It’s also important to remember that overall, there are still macro and geopolitical systemic risks that could deter a bullish story for ETH. Let’s see if the price can hold after The Merge.”
Decentrader drew comparisons to bitcoin’s hard forks, which occurred in the second half of 2017 and beyond. For now, the risk of distraction remains.
“In the long run, The Merge has fundamental changes that we are considering as bullish on Ethereum, but the actual event is bound to fluctuate as the market grapples between stories,” “Be extremely wary of scams, token forks, etc., we’ve seen a lot around the Merge and ETHPoW forks.”
ETH/USD trended down for the second day in a row at the time of writing, reaching $1,760 after reaching a local high of $1,790.
The difficulty, Hash rate reach an all-time high
Bitcoin’s network fundamentals have been nothing but bearish lately, and this week, that trend continued to reach new heights.
Both Bitcoin’s mining difficulty and hash rate have reached or will reach new all-time highs in the next 48 hours from September 12.
According to estimates from BTC.com resource monitoring, the difficulty will increase by 3% at the next automatic adjustment, bringing it into the unknown area for a total of 31.91 trillion.
That follows a previous jumbo correction of 9.26% two weeks ago, which constituted the biggest gain since 2021 as well as served as a sure signal that miner competition is healthier than ever.
Indeed, since their latest “speculative” period ended last month, according to on-chain data, miners have been racing to add hashing power to their operations. This is evidenced by the Hashrate – the estimated combined hashing power of the Bitcoin network – which itself has skyrocketed to levels never seen before in recent days.
According to MiningPoolStats, that spike occurred on September 5 and involves approaching 298 exahashes per second (EH/s). The hashrate is currently hovering below 250 EH/s.
Meanwhile, reaction analysis platform TheTIE noted that hashrate has moved the time for the next Bitcoin block subsidy halving event forward.
“As bitcoin hashrate rises to an all-time high, there is an important second impact to remember: Halving. Previously, it was expected to take place in 2024, but now the expected date for the next $BTC halving has been moved to Q4 2023.
Extreme fear
As the data and analysis look optimistic, the overall cryptocurrency market still can’t shake the sense of foreshadowing.
The Crypto Fear & Greed Index, after briefly exiting higher levels, has returned to “extreme fear” since 9/12, a sign that a clear change of trend has not yet emerged.
“Extreme Fear” is where the Index has spent most of 2022, including the longest period ever span lasting more than two months in a row.
For Santiment, a platform that specializes in analyzing cryptocurrency sentiment, there is reason to be cautious thanks to profit-taking activity on both Bitcoin and Ethereum.
“Bitcoin rebounded above $22K today for the first time in over 3 weeks,”
“The profit-to-loss trading ratio of $BTC is the highest since March and it seems that many have taken this slight increase as a trigger for trading again.”
