The price of Bitcoin (BTC) is approaching the last weekly candle in August. Some traders believe that Bitcoin’s performance over the next two weeks could decide if the price will drop below $ 10,000 again or if we will see a prolonged uptrend.
The close of the weekly candle coincides with the expiration of CME Bitcoin futures contracts and Deribit options contracts. It could potentially set a precedent for the month of September, especially if Bitcoin closes above or below its key levels.
Short term, $ 11,800 is often viewed by technical analysts as the key level for Bitcoin. Closing for a long period of time, close to the level, would increase the chances of a more pronounced pullback. A close above, keeping the monthly candle green, could see Bitcoin see another raised leg.
Mohit Sorout, founding partner of Bitazu Capital, said in a Tweet that a run to $ 11,800 would “put sellers to sleep.” Sorout referred to the daily chart of Bitcoin with Bollinger Bands, which shows the area of interest for both sellers and buyers.
With just a few days to the monthly close, the Bitcoin futures market is still very careful. Typically, the number of long contract holders in the futures market outnumbers the short-term sellers. Bybt data show that long-term contracts account for 53.36% of the market, showing that traders are cautious as September rolls around with three major scenarios within the wild cards.
The short-term bullish scenario for Bitcoin
For Bitcoin to maintain its bullish momentum in the short term, traders say that the price of BTC mainly needs to rally above the support-turned-resistance level of $ 11,800. If this occurs, traders anticipate another possible move towards $ 12,500. However, some others believe that Bitcoin’s main support trend line places the next support area around $ 10,900.. Therefore, if BTC remains above the range between $ 10,900 and $ 11,500, it would maintain its short-term bullish scenario.
A cryptocurrency trader known as “John Wick” believes that investors are not considering the longer terms, as the weekly chart, which uses Bitcoin’s bottom of $ 3,600 in March and the local bottom of $ 9,130 in July as basis points, shows a support trend line. As long as the trend line does not break intensely in the short term, the trader hinted at a Tweet that this could be an optimistic market structure.
The cryptocurrency analyst, Nunya Bizniz, suggested a similar scenario in a longer time frame. If the current monthly candlestick structure follows the previous formations, the analyst said there is a possibility that it will mark the start of a new bull run. That would indicate that the price of Bitcoin would potentially see a steady rise over the next 6 or 12 months, tuiteando:
“BTC month: VWAP pegged at previous cycle highs. A successful retest of the AVWAP has led to bull markets. Does the current month satisfy the new test and will it lead to a bull run (this) time? Note: gray vertical line = halving “.
However, a variable in the expectations of a run similar to that of 2017 is that the second halving occurred in mid-2016. If a similar trend emerges, the chances of Bitcoin seeing a proper run are higher by the end of 2021, rather than occurring during the winter of this year.
BTC’s cautiously bearish case
Short term, Traders started showing signs of caution after Bitcoin fell below $ 11,500. A trader known as “Mayne” He said that Bitcoin’s initial drop to $ 11,400 is not the trend the bulls want to see. Since then, Bitcoin has consistently seen a pattern of a lower peak, typically showing momentum slowing. Mayne tweeted: “Price with a false breakout high and now going down. The last 2 up moves clearly look like new bearish tests. If it comes to distribution, expect sales to pick up soon. The bulls need to get in and get back $ 11,700. “
Lower peak formation refers to when the price peaks at a price lower than the previous peak. Bitcoin’s daily candle closed at $ 11,748 on August 24, while the next three daily candles closed below $ 11,500, forming a lower peak pattern. Bitcoin would have to break above $ 11,800 to cancel the pattern of a lower peak, making it a short-term critical level.
Bitcoin’s slowdown in momentum from its peak in mid-August coincides with the decline in address activity. Brian Kelly of CNBC ha used daily address activity on the Bitcoin blockchain as a key fundamental metric for some time. Since mid-May, address activity on the Bitcoin network has declined considerably, Santiment’s data shows that it has fallen by almost half, clarifying that reduced address activity is a warning sign that network activity is experiencing a drop. The company tweeted: “The -3.7% price was surely related to the -19.3% decline in this metric from its peak of 1.13M active addresses on Aug. 6.”
The confluence of lower peaks on the daily chart, the slowdown in fundamental metrics, and Bitcoin’s consolidation below $ 11,800 they are apparently making the market more cautious.
Price stagnation
As an alternative scenario, Some investors believe that Bitcoin could see months of low volatility before seeing the next big price move. And Tepiero, co-founder of 10T Holdings, He said that each price cycle in the past took around 800 and 1,100 days to complete. Bitcoin is currently less than 400 days into the current cycle, indicating that BTC could swing on the sidelines for the next 3-12 months.
If Bitcoin price remains stagnant, some foresee a prolonged altcoin season. Bitcoin’s dominance index is a concern for altcoins for the foreseeable future, as it is approaching key levels of technical support. But, Historically, altcoins have thrived during Bitcoin’s consolidation phases.
Tepiero urges everyone to be patient with Bitcoin, tuiteando: “Each upward cycle takes longer to develop and is less extreme as the dollar’s absolute monetary value increases. It may take another 6 or 12 months before the price skyrockets. An obscenely high price should no longer matter. Hodlers rejoice.” .
Traders remain mixed as Bitcoin enters September, which has historically been a slow month. In previous years, BTC often saw an uptrend in August, followed by a consolidation through November. BTC’s tendency to stagnate throughout the last quarter of the year is reflected in the indecision of the futures market.
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