(Kitco News) – Ongoing volatility in financial markets suggests that traders are anxiously awaiting Friday’s comments from Fed Chair Jerome Powell regarding interest rates, with market watchers paying close attention to any hints that a 50 basis point cut may be on the table since the odds of a 25 bps cut in September still stand at 100%.
Data provided by TradingView shows that Bitcoin’s (BTC) price whipsawed in early trading on Wednesday, rapidly oscillating between a low of $58,865 and $60,237, with bulls continuing to push the price action higher in an effort to resecure support at $60,000.
BTC/USD Chart by TradingView
“The crypto market once again failed to break through the $2.15 trillion cap mark, falling 2.3% to $2.1 trillion, almost back to where it started Tuesday,” said Alex Kuptsikevich, senior market analyst at FxPro.
“From the technical analysis side, Bitcoin retreated to the downside after another test of its 50-day average,” he added. “The price of Bitcoin has been mostly in the $59-60K range for the past six days. Yesterday, it seemed that the main institutional demand was for other assets, such as gold.”
Proprietary global macro trader Mark Dow warned that the fact that Bitcoin was unable to climb back into the $60,000 to $70,000 range amid the recent pivot back to ‘risk on’ is “not a great sign” for Bitcoin bulls.
Not a great sign for #bitcoin bulls that it couldn't even get itself back into that 60-70k on the back of a powerful risk on run. pic.twitter.com/4XcaUGyfv5
— Dow (@mark_dow) August 20, 2024
According to legendary trader Peter Brandt, the “Weekly and daily graphs [for Bitcoin] continue to form a megaphone or broadening triangle pattern,” but what happens next is still open for debate as there is “No declaration of next trend yet [for] $BTC.”
Analysts at Secure Digital Markets aligned with Brandt, saying it’s still too early to tell what happens next for BTC.
“Bitcoin's recent price activity has been relatively subdued, with occasional spikes that are quickly met by selling pressure,” they said. “The short-term outlook remains uncertain, and a decisive break and close above the $61,000 mark, particularly above the 50-day moving average, would be necessary to shift sentiment toward a more optimistic outlook. Although the market has faced significant selling pressure, the end of the summer period is expected to bring increased liquidity, especially as the U.S. elections approach.”
But, according to CryptoQuant analyst Axel Adler, Bitcoin is nearing the end of an extended consolidation phase and could soon start trending higher.
“After Bitcoin reached the $57,000 mark, we observed an increase in the average daily token transfer volume from $650K to $765K,” he said. “This change coincides with Bitcoin's price stabilization within the local consolidation range of $57K-$68K.”
Adler said, “The increase in transfer volume is primarily due to panic selling by holders. Despite this, Bitcoin's price shows resilience, suggesting that the market has absorbed the selling pressure without significant declines.”
He added that this shows an increasing “demand for ‘once expensive’ coins.”
“The consistent price range during the increase in transfer volume indicates stable demand for Bitcoin, suggesting that investors are keen to acquire these once-expensive coins at what they now perceive as attractive prices,” he said.
“The observed increase in token transfer volume at the $57K level serves as an indicator of sustained demand for the coins,” Alder concluded. “This demand points to a bullish outlook among many market participants. I believe we are approaching the final phase of market consolidation, which typically involves narrowing price movements and decreased volatility as the market agrees on Bitcoin's value.”
At the time of writing, Bitcoin trades at $59,580, an increase of 1.2% on the 24-hour chart.
