Bitcoin ( BitcoinTC) begins a pivotal week with a firm footing, as bulls win weeks of losses.
The latest weekly candle closed at $21,800. This is its highest level since mid-August. BTC/USD is now back in the radar as a long wager.
An extended period of negative price action, interspersed with sideways movement in prices, appears to be over. Volatility is expected to become a dominant theme in the next few days.
Few weeks in Bitcoin history have been so hectic as this week.
The September 15 Ethereum Merge will be followed by the September 13 release of August Consumer Price Index data. This will allow for the examination of the US inflation trend. Unpredictability is the recipe.
How can Bitcoin weather the storms? Although the macro picture is bleak for risk assets, the on-chain data shows that Bitcoin has reached a price bottom.
Additionally, Bitcoin’s fundamentals are set to reach new all-time highs in the coming week. This underscores miner resilience, recovery, and conviction over profitability.
Cointelegraph looks at the key areas that Bitcoin is able to outperform “Septembear”.
BTC short-term bets are boosted by solid weekly closes
Bitcoin bulls received some relief from the latest weekly close.
BTC/USD finally closed the week with a convincing performance after weeks in poor performance . This was despite a candle close correction. Data from Cointelegraph Markets Pro as well as TradingView show.
The Sept. 11 event, which was just over $21,800, provided a solid foundation for a week that would deliver significant volatility.
This level is currently forming a consolidation area, coinciding the important trendline of Bitcoin’s realized value. This currently stands at around $21,770, according to the on-chain analytics firm Glassnode.
BTC/USD is yet to address more important bear market levels that were lost last month as support, principally the 200-week moving mean, now at $23,330.
Despite the spike in Bitstamp’s overnight price to $22,350, traders still noticed it and made further calls for upside.
“This was only preliminary supply at 22300,” popular Twitter account Il Capo from Crypto wrote in one the many recent updates.
“I still believe 23k is possible. We then see a reversal.”
also tweeted to warn about “major resistances”, which are currently in play for Bitcoin and other altcoins.
“In my view, we see a final leg up of 5-7% soon. Then ltf distribution then nuke. It said, “Get ready.”
Cheds , a fellow trader, noted that Bitcoin had tagged its upper Bollinger Band daily, a sign of volatility starting. The bands are slowly spreading to allow for a wider trading range.
CPI inbound combines with dollar nosedive
The United States Federal Reserve is one of the main points of conversation for this week’s BTC price action.
CPI data for August is due, and there are hopes that the decreasing inflation trend continues after July’s peak was formed.
A huge week ahead
CPI Data will most likely provide a direction to the FED.
– $ETH merger is near, which is one the most significant events in blockchain over the past year.
– Climax on the strength of the $DXY possibly approaching.
— Michael van de Poppe (@CryptoMichNL)
September 12, 2022
If that is the case, it will be a blessing for risk assets that are suffering from a rising U.S. Dollar.
According the FedWatch Tool of CME Group, the Fed’s Federal Open Markets Committee will likely raise its interest rate by 75 basis points at its September meeting next Wednesday.
Dollar watchers have reason to believe, however, that the return of risk assets should be a reality in the coming days.
In just four days, the U.S. dollar Index (DXY) has fallen by nearly 2.7% from its twenty-year high.
— Trader_J (@Trader_Jibon)
September 12, 2022
“One thing that makes me doubt my downside bias in Bitcoin & Crypto post the ETH merger even,” analyst Mark Cullen said. Cullen is the creator of trading resource AlphaBTC and revealed.
“We see potential to form 3 drives of bear divergence on the RSI & Sept FOMC is next Wednesday. It would be interesting to see $DXY break down the parabola and push risk assets higher.
Donald Pond, Phoenix Copper’s executive, said that the USD and DXY charts were “the most important out of all.”
He tweeted that the dollar was “far too strong atm” and had been killing all other things.
It has dropped rapidly over the last few days but is still in an uptrend. Until trend breaks, there will be no sustainable bounce in markets.
The Merge is here
A purely internal price trigger , due to be released around September 15, will complement the encouraging inflation data.
After months of uncertainty, the event is now expected to be a reality. Ethereum will act as a transition network from proofof-work (PoW), to proof-of–stake (PoS). will serve as its hashing algorithm.
Social media hype has been growing and analysts are now wondering about the immediate aftermath. Analysts are speculating on whether investors will “sell news” and bring the markets down immediately after the Merge is complete.
These events tends to increase liquidity which can be used by the whales to their advantage through engineering certain moves or looks
If you are not in a position already, don’t rush to get one!
— Crypto Tony (@CryptoTony__)
September 12, 2022
Everyone is arguing about whether they should shorten or long the merge
It feels like one these games where you should not play
— Udi Wertheimer, @udiWertheimer
September 12, 2022
DecenTrader, a trading platform, stressed the importance of caution and avoiding an “up-only” mindset in a dedicated update published Sept. 10.
It wrote that “it is important to keep in mind that there are multiple possible headwinds that could turn the tables in favor of the bears. Specifically bugs in the Merge Code, a significant portion of the Ethereum network moving towards a fork taking with it market value, as well Macro headwinds coming from the US August CPI Data next week.”
“It is also important to keep in mind that there is still macro and geopolitical risk which could halt the most bullish narrative about ETH. Let’s see if the price holds, post-merger.
DecenTrader was compared to the hard forks in Bitcoin that occurred in the second quarter of 2017 and later. As before, distraction is still a risk.
The update stated that “Long-term, the Merge is bullish for Ethereum. But the actual event will undoubtedly prove volatile as the market wrestles with between narratives.”
“Be very cautious about scams, fork tokens, etc. We have seen many around the Merge, ETHPoW, and other forks.”
The USD/ETH trended lower for the second consecutive day as of writing. It was eyeing $1760 after reaching local highs at $1,790.
High levels of difficulty and high hash rates
Bitcoin’s network fundamentals are anything but bearish in recent weeks, and this week that trend continues.
As of Sept. 12, Bitcoin’s hash rate and mining difficulty have both reached or will reach new highs.
According estimates from monitoring resource BTC.com the difficulty level will rise by 3% at each automated readjustment. This would push it further into uncharted territory with a total value of 31.91 trillion.
is the latest jumbo adjustment, which was 9.26% two week ago. This is the largest increase in 2021 and a clear signal that the competition for miner jobs is stronger than ever.
According to on-chain data, miners have been trying to increase their hashing power since the end of their last “capitulation” phase last month. The hash rate, which is the combined hashing power of all Bitcoin networks, has risen to levels not seen in recent days.
The spike occurred on Sept. 5, according to MiningPolStats. It involved a short trip to 298 exahashes each second (EH/s). At the moment, the hash rate hovers just below 250 EH/s.
TheTIE Analytics Platform, meanwhile, observed the fact that the timing of the next Bitcoin block subsidy-halving event had been moved forward.
“As Bitcoin Hashrate rises to all-time highs, there is an important second order effect that you should remember: The Halving. It was originally expected to occur in 2024. However, the date for the next $BTC-halving has now been moved to Q4’23,” the company commented along with a chart of hash rates.
Extreme fear can be sticky
Despite all the analysis and data being bullish, the crypto market can’t shake the feeling of foreboding.
After a brief escape, the Crypto Fear and Greed Index is back in “extreme terror” as of September 12, a sign that there has not been a change in trend.
“Extreme fear,” is where the Index spent most of 2022, including its longest consecutive stint lasting more than two months.
Santiment, an online platform for the analysis of crypto sentiments, was cautious due to profit-taking on Bitcoin and Ether.
“Bitcoin has climbed above $22k today, for the first time in more than 3 weeks,” it stated.
“$BTC’s ratio transactions in profit vs. losses is at its highest level since March. It appears that many have seen this mild bounce to be the trigger to trade again.”
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.