‘The bond market bubble has burst’ — 5 things to know in Bitcoin this week

After securing its lowest weekly close for nearly two years, Bitcoin (BTC), begins a new week in a wild macro environment.

The largest cryptocurrency is now on the verge of collapse as risk assets in the global economy are weakened and the United States dollar rises.

After starting September on the bulls’ side of crypto markets, September is now living up its informal nickname “Septembear” and BTC/USD has fallen 6.2% since the beginning of the month.

Hodlers continue to be disappointed. They are holding on to their dormant currency in an increasing number as the dollar surges and the mainstream desire to diversify into more risky plays is waning.

Cointelegraph looks at the potential implications for BTC price action with macro still being the focus of everyone’s attention this week.

These are the factors you should consider when assessing where Bitcoin might go next in economic conditions that rival any significant period of historical turmoil over the past century.

Weekly close sends Bitcoin/USD back to November 2020

Although it was not as bad as the week before (3.1% versus 11.%), the last seven days managed to generate Bitcoin’s lowest weekly close since November 2019, according to data from TradingView and Cointelegraph Markets Pro.

Bitcoin continues to face downsides, so it has reverted the clock back to the time before the breakout. This took Bitcoin beyond its previous halving cycle’s alltime high.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

A feeling of déjà vu is not something that the average hodler likes. The vast majority of cold storage and buying over the past two year is now underwater.

Popular Twitter analyst SB Investments summarised the closing: “$BTC just made a lower weekly close in this area.”

Stocks are looking to break resistance as well. “Looks bearish. On the other hand, this is what everyone anticipates.

The key argument for Bitcoiners is whether the markets will surprise us with a “max pain” move to upside. Liquidating short bias is another alternative argument. Popular trader Omz believes that the $18,800 weekly close price is a convincing local bottom.

JACKIS, a trader, has noticed the RSI divergence elsewhere.

He tweeted that “We only had two touches of the territory oversold in the past and they have always marked exactly the bottom as well.”

IncomeSharks, a fellow trading account, also suggested that there could be a reversal in the U.S. midterm elections. However they did not say that the bottom was in.

It commented on the 4-hour chart of the day, “Elevator down and stairs up”.

Keep building double bottoms, new supports, Midterm Rally is still on the table. This structure must be broken, these targets removed, and a new bottom created.

BTC/USD 4-hour candle graph (Bitstamp). Source: TradingView

Dollar wrecking ball can cost stocks, fiat

Monday is barely underway and macro markets are already reeling from the turmoil of last week.

The unstoppable U.S. Dollar is ruining key trading partners currencies. The Great British Pound Sterling makes headlines as it plummets 5% to just a few percentage points of USD Parity — its lowest level against the greenback in years.

GBP/USD would fall if the euro becomes less valuable than $1.00. Last week, the misery forced the Japanese authorities to artificially support the yen exchange rates.

GBP/USD 1-day candle charts. Source: TradingView

The EUR/USD fell briefly below $0.96, but then a slight rebound occurred. However, the USD/JPY is still at its highest level since 1990s despite Japan’s intervention.

Alarm bells are also sounding for global bond markets, which have fallen to 2020 levels. Markets commentator Holger Zschaepitz warned alongside Bloomberg data:

“It looks like the bond market bubble burst. Global bonds’ value plunged another $1.2tn last week, bringing the total loss to $12.2tn.

Stocks will not fare well, with futures falling on the day before the Wall Street Open. Brent crude oil dropped below $85 per barrel, the first time this has happened since 2022.

“Global bonds are collapsing” in their fiat currencies. This is according to Saifedean ammous, author and editor of “The Bitcoin Standard” (and “The Fiat Standard”):

It will take months and years for the average fiat user to realize how financially ruined they are. The new normal is poverty.

The outlook for Bitcoin is therefore less positive than it appears, as crypto remains highly correlated to stocks and inversely related against dollar strength.

The Euro Area Consumer Price Index, (CPI), is due this week. It will show that inflation continues to rise, while the U.S. The U.S. downtrend in personal consumption expenditures price index (PCE) should continue, according to the opposite.

The U.S. dollar Index (DXY), however, shows no signs of reversing and is currently at its highest level since May 2002.

U.S. dollar index (DXY) 1-month candle chart. Source: TradingView

Hodlers in the classic bear market mode

It is not surprising that Bitcoin hodlers are becoming more convinced and long-term investors refusing to sell in the midst of all this chaos.

Sturdy hodling is a characteristic of Bitcoin bear markets. The latest data proves that this mindset is back in 2017.

Glassnode, an onchain analytics firm, says that Bitcoin’s Coin Days Destroyed (CDD metric) is hitting new lows.

CDD is the number of days that remain dormant after BTC leaves its wallet. CDD that is high indicates that there are more long-term coins stored in the wallet.

Glassnode stated that the total number of Bitcoin coin-days lost in the last 90 days has reached an all-time low.

This indicates that coins that have been HODLed over a period of months or years are at their most dormant.

Annotated chart: Bitcoin 90-day Coin Days Decoyed (CDD). Source: Glassnode/ Twitter

This news comes after weeks of hodl-focused metrics that showed a commitment to keeping the BTC supply under lock & key for better days.

Glassnode also noted that there was an increasing number of coins being hoarded for at least three consecutive months, as a percentage of the USD supply of BTC.

It agreed that “Bitcoin HODLers seem to be steadfast in their conviction.”

The accompanying chart displayed Bitcoin’s HODL waves metric — a representation of the supply that has been reduced by coin dormancy.

Annotated chart of Bitcoin HODL Waves Source: Glassnode/ Twitter

Support and resistance are still dictated by whales

Old hands tend to ignore the “sell” button while Bitcoin’s largest volume investors are constantly on the radar of analysts for price movements.

Due to the amount of trading activity that involved whale money in the past, the current trading range is an area of interest.

Large buys add weight to a support price, while the same holds true for resistance levels. According to Whalemap, BTC/USD currently lies between these two.

The Whalemap team stated that $BTC is possible by holding 19k-18k.

The accompanying chart shows that whale resistance levels limit Bitcoin’s ability to receive relief and keep it within the $20,000 range.

Annotated chart of Bitcoin whale resistance Source: Whalemap/Twitter

However, separate data from Santiment show that overall whale BTC exposure has dropped to its lowest level in two years.

Annotated chart of Bitcoin whale ownership Source: Santiment/ Twitter

Second week of “Extreme Fear”

The crypto market sentiment is back to 2022 norms and has been in “extreme fear mode” for over a week.

Related: 5 altcoins which could become bullish if Bitcoin prices stabilize

The average investor couldn’t feel more anxious about the future, according to the Crypto Fear & Greed Index. This index measures aggregate crypto market sentiment.

Fear & Greed scored 21/100 as of September 26, with 25/100 being the threshold for extreme fear.

This year, cold feet are not new to the market. It was seen for more than two months in “extreme fear”.

Screenshot: Crypto Fear and Greed Index Source: Alternative.me

Santiment pointed out that social media interest saw a rebound this weekend and could be a silver lining.

It revealed that $BTC was the topic of 26%+ discussions since mid-July, as part of the Twitter comments.

“Our backtesting has shown that 20%+ of Bitcoin users are positive for the sector.”

Annotated chart of Bitcoin social dominance Source: Santiment/ Twittercom. You should do your research before making any investment or trading decision.

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Donna Burk

Donna Burk– Business News My Name is Donna Burk and I am also the main source from the ‘Dailynewssheet.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

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