Bitcoin Price Strength Improves as Optimism Grows, FOMC Meeting and Network Fundamentals Drive Interest
Summary:
Bitcoin starts the week with optimism as the first green weekly candle in over a month appears. BTC price strength improves with BTC/USD climbing towards $27,000. The Federal Reserve's interest rate decision could impact crypto and risk assets. Bitcoin's network fundamentals are expected to surge to new records. Hodler behavior reflects strength "under the hood," with wallet numbers increasing. FOMC volatility is expected, with a 99% chance of a rate pause. Mining difficulty and hash rate return to new highs. The number of new BTC wallets reaches the highest level since 2017. The average crypto investor remains cautious.
Bitcoin (BTC) enters the new week on a positive note as traders welcome the first green weekly candle in over a month. After a weak August and start of September, BTC price strength seems to be gradually improving with BTC/USD approaching $27,000. The solid weekly close sets the stage for an interesting few days, including a key United States macroeconomic event that could impact risk assets, including crypto. The Federal Reserve's decision on interest rate policy could result in significant volatility. On the bright side, network fundamentals for Bitcoin are expected to reach new records. The strength "under the hood" is reflected in hodler behavior, with wallet numbers continuing to increase regardless of BTC price action. Let's dive into these topics and more as Bitcoin kicks off what is likely its most anticipated week of September.
Bitcoin's price showed little volatility over the weekend, but as the new week begins, calmer trading conditions are being challenged. According to data from Cointelegraph Markets Pro and TradingView, the weekly close on September 17 led to upside volatility, and bulls are currently trying to build on that momentum to reach new month-to-date highs. Popular trader Credible Crypto suggested that the weekend zone could be a "local bottom," with buyers stepping in to defend that region. Credible Crypto believes that BTC could push back up to $27,000 and beyond.
The weekly close excited Michaël van de Poppe, founder and CEO of trading firm Eight, who noticed that key support held at the 200-week exponential moving average (EMA). Van de Poppe explained that closing above the 200-week EMA is crucial for bullish continuation. He posted a chart showing the relationship between spot price and the 200-week EMA since 2020. The consolidation with a strong weekly close above the 200-week EMA suggests that the chances of the correction being over are increasing.
However, not everyone is as optimistic about Bitcoin's outlook. Popular trader and analyst Rekt Capital believes that while Bitcoin is in an early-stage bull market, there may be one last major correction over the next seven months. Rekt Capital advises being prepared for such a correction if it does occur.
This week, all eyes are on the Federal Open Market Committee (FOMC) meeting, where interest rate policy will be decided. Market expectations are leaning toward no rate hike, with CME Group's FedWatch Tool indicating a near-unanimous consensus for rates to remain unchanged. However, a surprise decision contrary to market expectations could have a significant impact on various assets, including Bitcoin and other cryptocurrencies. The FOMC meeting sets the tone for the rest of 2023, and volatility is expected.
Turning back to Bitcoin, fundamental growth is expected to dominate the coming week. Mining difficulty is projected to increase by 4.6%, erasing the previous 2.65% dip. This upward adjustment will push mining difficulty to new all-time highs. Hash rate, which measures the estimated processing power used by miners, continues to set new records. The recent spike in hash rate has generated optimism among commentators.
The user base of Bitcoin is also expanding rapidly, with the number of new BTC wallets being created reaching its highest level since late 2017. This trend indicates increasing interest and adoption of Bitcoin. Furthermore, active addresses are returning to mid-2021 levels, highlighting growing network activity. Despite these positive signs, the average crypto investor remains cautious, as indicated by the Crypto Fear & Greed Index, which reflects a sentiment of "fear." Price triggers have been influential in generating this cautious sentiment among investors.
Analyzing net unrealized profit and loss data among the BTC supply, popular trader and analyst Titan of Crypto identifies a correlation between this year's environment and previous Bitcoin bull runs. He suggests that Bitcoin's price action may follow a similar pattern to the first two cycles, with consolidation before resuming its upward trend.
Please note that this article does not provide investment advice or recommendations. Readers are advised to conduct their own research before making any investment decisions.
Published At
9/18/2023 8:59:28 AM
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