(Kitco News) – Bitcoin (BTC) continued to face bearish pressure overnight as the top crypto bounced off a low of $63,530 in the early hours on Thursday, retesting the lower end of the range it has been trading in since July 15.
BTC/USD Chart by TradingView
The weakness follows the Fed’s decision on Wednesday to hold rates steady – a move that was widely expected – and comes despite comments from Fed Chair Jerome Powell alluding to the possibility of a rate cut coming in September.
“Cryptocurrencies continued to sag, failing to support gains in the stock market, returning the crypto market cap to $2.30trn levels seen a week ago,” said Alex Kuptsikevich, senior market analyst at FxPro. “The market formed another lower local peak, a sequence that has been in place since March.”
“A move towards the lower end of the sloping range suggests the potential for another 20% decline,” he warned. “This is a pessimistic, non-mainstream scenario given Bitcoin's historically strong performance in these months post-halving and the good risk appetite in stocks and commodities.”
“Bitcoin was down to $63.7K on Thursday morning, once again near the 50-day moving average, which remains a tactical support line,” Kuptsikevich said. “If the decline develops, dynamics around the $63K and $61K levels, near where the 50 and 200-day moving averages are, will be important. A failure of this support will open the way to $55K, which is quite frightening.”
“Bitcoin ended July up 4.4% to $64,600. In terms of seasonality, August is considered one of the two worst months for BTC,” he concluded. “Over the past 13 years, Bitcoin has ended the month up only five times and down eight times. The average decline was 15.4% and the average rise was 26%.”
The fact that crypto prices have trended lower following the interest rate announcement from the Fed while stocks and precious metals climbed higher left many crypto traders searching for a reason why, and while Kuptsikevich’s observations about seasonality play a role, Karan Bharadwaj, CEO of Arithmic, noted that Bitcoin miners are also responsible for some of the weakness.
“The Federal Reserve maintaining interest rates and Mt. Gox selling off its Bitcoin is no longer new to investors,” Bharadwaj said in a note to Kitco Crypto. “These factors are locked in and the FUD sentiment for them has waned.”
“What is important to look at now is Bitcoin’s miner revenue metric,” he said. “It has been over 100 days since the halving and historically, Bitcoin tends to increase as miner revenue bottoms. With mining hashrates now at all-time highs, sustained price levels for BTC are more likely.”
Bitcoin miner revenue. Source: BitcoinMagazinePro
“However, if there is some worry surrounding Mt. Gox now repaying creditors, there’s good news,” Bharadwaj added. “The balance sheet of long-term holders is growing with their share network wealth higher than other dominant market peaks. This means that the primary market behavior is HODLing and investors anticipating higher prices to come.”
TradingView analyst TradingShot also sees a price increase for Bitcoin on the horizon and used a comparison with previous bull cycles to make his case.
“[I]n this special Bitcoin (BTCUSD) analysis, we compare the current Cycle to all past ones by plotting one on top of the other,” he said. “By classifying each Phase, we can see that all Cycles share some very strong characteristics.”
“More precisely, BTC appears to be currently approaching the end of the Break-out Phase (orange Rectangle),” TradingShot said. “That gives way to the most aggressive part of the Cycle, its Parabolic Rally Phase (green Rectangle).”
“As you can see, this is where all 3 past Cycles took off, the 2018 - 2021 Cycle (black trend line), the 2014 - 2017 Cycle (blue trend line), and the 2011 - 2013 Cycle (orange trend line), the latter of which is stretched in order to fit on the shared bottom of the others,” he noted.
“This chart doesn't technically show the Target value of the Cycle's top but rather serves as a useful benchmark to time this peak, in relation to the Tops of the previous 3 Cycles,” TradingShot said. “As you see, this might be towards the end of October 2025, i.e. a full year into the new U.S. Presidency, which is aligned almost perfectly with historic market behavior.”
At the time of writing, Bitcoin trades at $63,163 a decrease of 4.96% on the 24-hour chart.
