Bitcoin: FED speech in Jackson Hole. After the euro which returns below parity, the most pessimistic expect to see the BTC join a polarity zone at 13,000 dollars. After failing to rise above $25,000 last week, the decline resumed against a strong dollar. A busy week on the macroeconomic front could contribute to complicating matters, culminating in probable announcements of monetary tightening. We take stock.
Technical analysis: Bitcoin, an upcoming range between $19,000 and $24,500
After successively breaking its support at 23,000, 22,000, and then 21,000, Bitcoin managed to preserve the famous support of 20,000 dollars. However, the prospect of rising interest rates and the recent desertion of institutional investors shows that the bear market is far from over.
BTC/USD in Day View – TradingView
In the short term, Bitcoin has been stabilizing since Sunday at the support of 21,000. A stabilization phase will probably take place inside a range between 19,000 and 2 4 500 dollars. Breaking one of the two terminals will set the tempo for the rest.
In the medium term, the technical analysis also suggests a continuation of the decline. It is clear that the BTC has validated a double top on its weekly chart, and that the Ichimoku displays a red cloud for the next candles.
The most pessimistic speak of a polarity zone at $13,000. However, it will take a break from the support at $19,000 to give credence to this hypothesis.
BTC/USD Weekly View - TradingView
As for the dollar, it shows no sign of a reversal, neither in the indicators nor in the configuration of its weekly candles. The euro has even fallen below parity again at the time of writing ($0.99508).
DXY Weekly View – TradingView
New selling pressures to come? 141,000 BTC about to be released by Mt. Gox
More than 8 years after its bankruptcy judgment in Japan (February 2014), the Mt. Gox platform is preparing to return 137,000 BTC to its customers whose accounts had been frozen.
As a reminder, Mt. Gox managed between 2010 and 2014 more than 80% of cryptocurrency exchanges. Victim of a hack, it would have lost 850,000 BTC gradually, over several months, until February 2014. 200,000 tokens had been "found" by its founder Mark Karpelès, for a time nicknamed "the Baron of Bitcoin", on an old wallet … inactive since 2011.
Does this massive release of bitcoins represent a danger for the course?
Difficult to prove wrong investors forced to HODL their bitcoins for three bullish cycles in a row, and who is at 80 - 100x their initial investment...
Because even if the BTC evolves at 70% of its historic peak, it is far from the 820 dollars of February 2014. Hostile environment or not, many of these cheated investors will be tempted to take at least 50% of their profits.
Because even if the BTC evolves at 70% of its historic peak, it is far from the 820 dollars of February 2014. Hostile environment or not, many of these cheated investors will be tempted to take at least 50% of their profits.
Mt. Gox wanted to reassure everyone by announcing that they would reimburse investors in a phased manner, in order to avoid fueling excessive selling pressure.
“If the sale of Mt. Gox bitcoins were to have the same effect, it would surely drive the price towards $10,000. However, in the previous months, such selling pressure has already been experienced, especially with the Luna crash or the 3AC crash, and did not drive the price so low”
This week's highlight: Jerome Powell's talk at the Jackson Hole Economics Symposium.
Markets will have their eyes on Jackson Hole, Wyoming, where the Kansas City Federal Reserve Economic Policy Symposium is being held on August 25-27.
Pretty much, it's the annual briefing and review meeting of the world's central bankers, led by the boss of governors – Jerome Powell, Governor of the Federal Reserve. ECB President Christine Lagarde will not make the trip and will be replaced by Isabel Schnabel.
Two key moments to follow:
Jerome Powell's lecture, Friday at 10 a.m. local time (4 p.m. CET).
The reaction of the Dollar Index (DXY) to this speech.
After the publication of the CPI (Consumer Price Index) on August 10 and the NFP ( Non-farm payroll ) report on the labor market in the United States on August 5, the conference will give additional clues as to the next Fed interventions.
It is very likely that Jerome Powell will say that the Fed will maintain its desire to raise rates for as long as necessary to bring inflation back to 2%.
Clearly, key rates, currently at 2.50%, will certainly drop to 3.25% on September 21 – then to 3.50% on November 2. The CME puts the probability of this happening at 56.5% ( see image below ).
Given the correlation between Bitcoin and stock market indices, the Fed's monetary policy is a theme closely followed by investors.
BTC's test of $25,000 was primarily triggered by anticipation that the Fed might ease policy and cut interest rates if inflation started to ease (and the US economy entered a recession).
However, there is no indication that this is about to happen, so it is to be expected that BTC – and all of the altcoins – will suffer further.
Can we expect a "flipping" to come?
However, should we expect a major divergence between bitcoin and Ethereum?
You are probably familiar with the " flipping ", this moment when the capitalization of Ethereum will exceed that of Bitcoin. This theory has made a comeback on social media in recent days and several analysts are suggesting that the reversal could even take place sooner than expected.
It will not have escaped your notice that Ethereum's switch to proof-of-stake (PoS, Proof-of-Stake) on its mainnet is expected for September 15th. After a successful merger on its various testnets (Ropsten, Sepolia, and Goerli ), the actual merger – “ The Merge ” – will therefore be the next step.
Where a problem emerges is that The Merge coincides with the release of bitcoins from Mt. Gox.
On paper, we are still far from it: the BTC in circulation are valued at nearly 409 billion dollars, against less than 19 billion for ETH. But the zero risk does not exist, this hypothesis will take on even more thickness as The Merge approaches.
With the rise of the Dollar, we are starting to have information on the next Fed meeting, as many investors are already anticipating a one-notch increase in interest rates. 3-month BTC futures are already bearish. This means that even institutional investors are beginning to price in that the Fed will only be dovish when US inflation returns to 2%.
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