As fresh economic data from the United States boosted hopes for a pivotal Federal Reserve move, Bitcoin ( BTC ) rose quickly on Aug. 26,
Bitcoin stays steady, but bounces
This was a surprising turnaround for Bitcoin which had been under selling pressure hours earlier as markets awaited cues by Fed Chair Jerome Powell’s Jackson Hole symposium speech.
The latest Personal Consumption Expenditures Price Index, (PCE) was released, and it was lower than expected.
Analysts responded positively to the fact that the numbers supported the notion that U.S. Inflation had already peaked, a narrative already supported and confirmed by the Consumer Price Index (CPI).
This is how the crypto market responded to the better than expected PCE Report. #BTC liquidity has been in motion. It is possible to rip through the range prior to speech at 10:00 ET. After all it is #FED #FuckeryFriday #NFA pic.twitter.com/32jU1WNPGm
— Material Indicators (@MI_Algos)
August 26, 2022
Caleb Franzen from Cubic Analytics, senior market analyst, noted that the hourly structure for BTC/USD was still in place despite the increase. Since the Aug. 19 decline from higher levels, Bitcoin traded in an unchallenged range.
#Bitcoin 1hr is still in place after the PCE data.
The red range is facing resistance. We are also retesting our former support trendline (teal), that is also threatening to be resistance. pic.twitter.com/bTZF9rxVsa
— Caleb Franzen (@CalebFranzen)
August 26, 2022
Kevin Svenson, an analyst, was also cautious about the potential knock-on effects of Bitcoin.
“PCE data are bullish. FED uses this data, so now speculators betting up,” he explained.
“But, if Powell keeps the course then it is possible to dump back down. So be careful. It’s like a coin flip.
BTC/USD traded around $21,500 at the time of writing. This is a key region that contains Bitcoin’s realized value.
“Most participants” in Bitcoin have fallen asleep
BlockTrends analyst Caue Oliira gave bad news to those who were hoping for a more explosive return to BTC price action by analysing longer-term trends.
He stated that network usage was still trending down and was supported by strong volume.
He admitted that “Bitcoin’s New Bull Market was Canceled, At Most For Now.”
“There are no signs that there will be an increase in demand for Bitcoin, so the resumption of Bitcoin’s price is unlikely to happen, which points to a momentary accumulation.”
Glassnode, an on-chain analytics company, provided a chart that showed the median on-chain transaction volume at its two-year lows. This includes accounting for the recent price rise.
Oliveira said that this explained the four year low in BTC reserves on exchanges, which was due to a decrease in trading activity and speculative activity.
He concluded that “for now, most participants remain active, including institutional ones.”
“Good time to accumulate long-term funds, but short-term traders should be cautious.”
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph.com. You should do your research before making any investment or trading decision.