Starting the new week around $26,000, Bitcoin (BTC) is having its worst August since 2023.
Ten days after a sudden drop, the bulls still haven't been able to retake the market and give BTC a relief bounce.
It's still being determined what to expect, especially because September has historically been a bad month for Bitcoin, and August is about to end.
The Personal Consumption Expenditures (PCE) Index data stands out in an otherwise quiet week for crypto contagion, indicating that macro causes are again taking a backseat.
With little sign of a turnaround, many traders and experts are still preparing for the worst.
Cointelegraph examines the most significant upcoming Bitcoin price performance topics.
BTC PRICE DROP WITH MONTHLY CLOSE ON THE HORIZON
Knowing earlier closes makes it easy to predict where Bitcoin's most recent weekly candle will land.
Data from Cointelegraph Markets Pro and TradingView shows that after holding at $26,000 into the close, BTC/USD quickly fell south, falling to $25,880 before consolidating slightly higher.
That marked fresh multiday lows, and pressure from shorts may continue into the coming week, as popular trader Skew predicted.
According to X (formerly Twitter), "Shorts continue to stack into the weekend, expecting some kind of move around U.S. Futures open and into Monday EU session."
Skew also referred to Bitcoin's (BTC) conduct over the weekend as "max pain price action."
After August's 11% losses, the monthly close became a hot issue among market participants, who anticipated more volatility in the coming month.
Material Indicators' co-founder Keith Alan foresaw a drop to multi-month lows.
Alongside a Binance BTC/USD order book chart, he said, "Whales aren't buying yet, and neither am I." He said that he expected volatility to persist till the close of the monthly candle. I am holding out for a chance to try out the local low.
The accompanying order book chart depicted a general lack of bid liquidity, with $25,500 attracting only moderate interest.
"I am looking for a trigger to enter where we drop to $25,000 lows, reclaim, and pump," said popular trader Crypto. Or, suppose we convert $26,700 into aid," Tony added. Since we are only in the middle of the range, there is no safe time to invest in Bitcoin till then.
Rekt Capital, a popular trading and analysis firm, warned that moving averages, providing support before the fall, would now provide the opposite impact.
Along with a weekly price chart, he summed up, "The BTC bullish momentum moving averages may act as resistance."
Further study anticipated a lower low construction on weekly timeframes as part of a "subtle rising wedge."
THE RISKS IN AUGUST WERE THE WORST IN EIGHT YEARS
Despite August's historically lackluster performance for bulls, it's no secret that Bitcoin has underperformed this month.
The Bitcoin/U.S.-Dollar exchange rate is down 11% this month, and traders are getting anxious as the weekly close approaches.
CoinGlass, a monitoring resource, shows that this August is already in a statistical dead heat with last year's August to become Bitcoin's worst August since 2015. In August 2022, the price of Bitcoin fell by 13.9%, marking the beginning of a painful half-year.
The Bitcoin Price: Could it Drop to $22,000 This September? Last week, Rekt Capital asked in an X post, "To answer this question, we need to first focus on August. How bad was Bitcoin's August drawdown historically? 2014 saw a drop of 17%, and 2015 saw a drop of 18%. Currently, in 2023, $BTC is down by around 16%. Bitcoin would be worth about $24,700 if it dropped by -18% this August. However, it's possible the retrace has yet to be through.
Rekt Capital continued by saying that September is often characterized by a "single-digit drawdown." With its recent double top on weekly time frames, a $22,000 objective makes sense.
He concluded that "if BTC retraces, say, an additional -10% in September... That would mean price would drop to $22200," which is close to the Measured Move goal for the Double Top breakdown of $22000.
BTC'S "LONGEST BEAR MARKET IN HISTORY"
Meanwhile, the full magnitude of the recent bear market is shown by examining year-on-year (YoY) percentage returns for BTC/USD.
Co-founder and CEO of trading firm Eight, Michal van de Poppe, has concluded that this is indeed Bitcoin's "longest bear market in history."
Similar market conditions to the present bear market were seen in 2015. He recently shared his thoughts on the cryptocurrency market, saying, "Right now, price of Bitcoin is nowhere near the valuation of the peak in November '21. This period of sideways action comes as faith in crypto is slowly being lost too, despite the fact of solid fundamental growth." It's in a bear market and has dropped by more than 50% in just 490 days.
A graphic contrasted the 386 days in 2015 to the current 49 days of negative YoY returns.
Even favorable news developments, such as the potential approval of the first U.S. Bitcoin spot price exchange-traded fund (ETF), have yet to enter the market's consciousness, Van de Poppe continued.
He added that "during the present period, these events are not being reflected in price at all," because "the market is stuck in the 'bear market modus,'" with prices declining for the past two years.
MUTED CRYPTO JACKSON HOLE REACTION FOLLOWS PCE DATA
Recently, bitcoin and alternative cryptocurrencies have paid little attention to broad economic trends.
Markets have yet to react to interest rate increases or data releases from the Federal Reserve, such as the Consumer Price Index (CPI).
CME Group's FedWatch Tool indicated bets on a pause in rate hikes beginning next month at above 80%. However, the trend continued with statements from Fed Chair Jerome Powell at last week's Jackson Hole Economic Symposium.
This week, despite including PCE, the Fed's favored inflation gauge, made the same.
Hours before Bitcoin's monthly closing on August 31, PCE data is due, and then on September 1, we get nonfarm payrolls and unemployment numbers.
However, financial commentary is useful. The Kobeissi letter forecasts an "action packed week."
Part of its most recent X analysis stated, "Huge week for ALL things related to economic data, volatility is back."
HASH RATE ON RECORD REFLECTS "MINER BULL RUN"
According to Cointelegraph, one hypothesis predicts miners would bid Bitcoin prices higher in Q4 in anticipation of the April 2024 block subsidy halving, which will reduce their payment per generated block by 50%.
The market may only respond to emission adjustments after the fact, but that shouldn't stop "smart money" from joining in and creating its own buzz around the halving narrative.
As the discussion continued, James Straten of CryptoSlate, a startup that provides crypto insights, pointed out that the Bitcoin hash rate was rapidly approaching unknown territory.
The Bitcoin hash rate is over 400 th/s, a new record. This is the miner bull run before the halving next year, he told X subscribers, which is "mind-blowing" given the energy problems in Texas and the rising cost of electricity worldwide. Comparable to the exponential increase in hash rate that preceded the halving in 2020.
While it's impossible to get an accurate reading on the hash rate—an estimate of the processing power committed to mining—the latest numbers from on-chain analytics firm Glassnode reveal not only new all-time highs but a slew of upward revisions, which stands in stark contrast to the BTC price's flat or declining performance.
The on-chain basic yardstick also hit new heights last week when Bitcoin saw one of its largest upward difficulty adjustments of 2023.
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