(Kitco News) – Little changed in the overall picture for cryptocurrencies on Friday as the intraday volatility that Bitcoin (BTC) experienced for most of the week continued to frustrate derivatives traders while King Crypto ultimately held near support at $59,000.
July’s Personal Consumption Expenditure (PCE) index reading aligned with economist expectations, further boosting expectations for a rate cut at the September FOMC meeting.
“U.S. equities showed resilience on Friday, capping off a turbulent month with modest gains as traders weighed crucial inflation data,” said analysts at Secure Digital Markets. “The S&P 500 climbed 0.5% as the personal consumption expenditures (PCE) price index, a key inflation metric closely monitored by the Federal Reserve, aligned with expectations.”
“The PCE index saw a 0.2% monthly increase and a 2.5% year-over-year rise,” they noted. “This data suggests that inflationary pressures remain contained, reinforcing market sentiment that the Fed may hold off on further rate hikes. Traders are keeping a close eye on these developments as they adjust their portfolios to navigate the shifting economic landscape.”
The CME FedWatch Tool now shows that Wall Street sees a 30% chance of a 50 bps cut, while most analysts have said the Fed will cap the first cut at 25 bps to maintain credibility.
Despite the positive reading on inflation, stocks showed ongoing volatility, climbing higher after the PCE was released, only to fall into the red near midday before an afternoon rally pushed them back into the green.
At the close of markets, the S&P, Dow, and Nasdaq were all in the green, up 1.01%, 0.55%, and 1.13%, respectively.
Data provided by TradingView shows that Bitcoin climbed to a high of $59,945 following the inflation report before experiencing a sharp pullback that dropped it to a daily low of $57,704, ensuring that both longs and shorts felt some pain.
BTC/USD Chart by TradingView
Bulls have since pushed it back above support at $58,500, and at the time of writing, BTC trades at $58,850, a decrease of 0.90% on the 24-hour chart.
Gold also struggled despite rate cut certainty, with spot gold down 0.77% at the time of writing and trading at $2,501.50 per ounce.
Bull vs. bear debate heats up
“After showing signs of bullish momentum towards the end of last week, Bitcoin saw a sharp rejection of the $64,500 level as this week began,” Secure Digital Markets analysts noted. “On Monday afternoon, BTC's price initiated a steep 10% decline, driven by significant selling pressure that emerged after the market failed to sustain the $64,000 support. This downturn signals a likely continuation of Bitcoin's price movement within the declining parallel channel seen on the daily chart.”
“BTC price currently sits in the middle of this channel at $58,440, but if the selling pressure persists and a retest of $58,000 ensues, price will likely drop further to $54,000,” they warned.
A survey of analysts on X showed a mix of bullish and bearish takes.
Both Altcoin Sherpa and Crypto Knight posted similar charts predicting a deeper pullback to $40,000.
$btc see you at 40k pic.twitter.com/3Jk6zvMUia
— KNIGHT $INJ TO 100$ (@cryptoknight890) August 30, 2024
Market analyst Moustache said this dip offers traders a second chance to accumulate before its next parabolic upswing.
#Bitcoin - The Puell Multiple
I call it here: This is your second best chance after 2022 to re-accumulate before the next wave starts.$BTC is where it was in 2012, 2016 and 2020.
Even if it doesn't feel like it, I think we've some incredibly exciting months ahead of us. pic.twitter.com/lpVXQOXvtC— ???????ⓗ? ? (@el_crypto_prof) August 30, 2024
Gert van Lagen posted the following chart showing what that upswing might look like once Bitcoin breaks out of its current consolidation pattern.
Once $BTC leaves Base 4, the steepest kind of ascent $BTC has ever witnessed is to be expected.#blowofftop pic.twitter.com/9WkSA6n4L9
— Gert van Lagen (@GertvanLagen) August 26, 2024
MN Trading founder Michaël van de Poppe helped provide some perspective by comparing Bitcoin’s performance with the S&P 500.
“Everything is a matter of reference,” he said. “If you value something against the U.S. dollar, then I don't think that's very relevant. If you do that, then you'll be questioning whether something is under/overvalued against a dollar without benchmarking anything. The value of the Dollar has been decreasing substantially over time, through which you'd rather want to value against the S&P.”
“#Bitcoin is still following the path of every other cycle and hasn't made any new all-time high against the S&P, through which you could say that we're still at the start of the actual bull cycle,” Poppe concluded.
And TradingView analyst MetaShackle provided a bird’s eye view, highlighting the formation of the biggest cup and handle formation in Bitcoin’s history.
“BTC is forming an absolutely massive Cup & Handle on the Daily/Weekly chart,” MetaShackle said. “There has never been a formation like this in the history of crypto, and it's sure to be an incredible run to levels that will shock the world.”
Altcoins finish the week in the red
Most altcoins finished the week in the red, with 90% of the tokens in the top 200 recording losses or gains of less than 1%.
Daily cryptocurrency market performance. Source: Coin360
Sun (SUN) continued to be the outperformer, gaining another 13.9% on Friday, while Beam (BEAM) climbed 6.5%, and Just (JUST) increased 5.5%. Popcat (POPCAT) was the biggest loser, falling 15.3%, followed by declines of 12.4% and 10% for BinaryX (BNX) and Klaytn (KLAY), respectively.
The overall cryptocurrency market cap now stands at $2.07 trillion, and Bitcoin’s dominance rate is 56.2%.
