Bitcoin (BTC), which rose quickly on Aug. 26, as new economic data from the United States fueled hopes for a pivotal Federal Reserve.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Bitcoin stays steady, but bounces
Cointelegraph Markets Pro and TradingView data showed a 3.55% increase in BTC/USD for the day. This allowed the pair to match its highs earlier in the week.
This was a surprising turnaround for Bitcoin, which had been under selling pressure hours earlier as markets awaited the speech of Fed Chair Jerome Powell at the Jackson Hole symposium.
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 previously supported by the Consumer Price Index.
This is how the #cryptomarket reacted to the better than expected PCE Report. The #BTC liquidity market is moving. It is possible to rip through the range prior to the #JPow 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.
The #Bitcoin 1hr structure remains intact after the PCE data. Resistance is expected to be encountered in the red range. We are also going to reteach the former support trendline (teal), that is also being considered as 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. He explained that FED uses this data and so now speculators have started to bet up.”
“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 the key area 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.
Related: CME Bitcoin futures record price in’very bearish’ sentiment
He noted that network usage was still trending downward, and there is little support for bull runs by strong volume.
He admitted that “Bitcoin’s New Bull Market was Canceled, At Most For Now.”
“With no sign of an increase of demand for the network the resumption of the price Bitcoin is still far away, pointing towards a momentary accumulation.”
Bitcoin median transaction volume (change-adjusted) chart (7-day moving average). Source: Glassnode/ Twitter
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 explains the four-year drop in BTC reserves on exchanges. This is because traders’ appetites have declined in tandem with speculative activity.
He concluded that “for now, most participants remain active, including institutional ones.”
“Good time to accumulate long-term wealth, but short-term traders should be cautious.” You should do your research before making any investment or trading decision.
Eileen Wilson –Technology and Energy
My Name is Eileen Wilson with more than 5 years of experience in the Stock market industry, I am energetic about Technology news, started my career as an author then, later climbing my way up towards success into senior positions. I can consider myself as the backbone behind the success and growth of topmagazinewire.com with a dream to expand the reach out of the industry on a global scale. I am also a contributor and an editor of the Technology and Energy category. I experienced a critical analysis of companies and extracted the most noteworthy information for our vibrant investor network.