According to on-chain data, Bitcoin still has bullish potential in this cycle.
With this fall, Bitcoin is giving new accumulation opportunities at “low” prices.
Bitcoin (BTC) reached its historical maximum (ATH) of $ 124,500 on August 13. However, he could not stay at those levels and the price collapsed below $ 113,000.
After falling to $ 112,900, Bitcoin showed a slight recovery and is currently negotiated at $ 113,3008.7% below its highest record.
Now, what is happening with the price of Bitcoin?
The first thing to say is that The focus is on Jackson Hole’s economic symposiumwhich will take place from August 21 to 23. This meeting, which brings together central bankers, finance ministers, economists and investors, will have as a key time the speech of the President of the United States Federal Reserve (Fed), Jerome Powell, scheduled for Friday.
The head of the agency responsible for defining the monetary policy of that country will speak in the midst of the bets that the Fed will make a 25 basic points of interest rates, which are currently in the range of 4.25% to 4.50%.
However, despite these expectations, everything indicates that Powell, once again, It will give a moderate speech, without great ads, without committing to future feat cuts and underlining the autonomy of the Fed.
This most cautious tone cools the optimism of investors and feeds a bassist feeling in the markets.
One sample is that, a week ago, the CME Group Fedwatch tool assigned a 94.3% probability that the Fed announced a cut in interest rates in September. Seven days later, that figure fell to 85.1% and could continue to decrease after Powell’s speech.
The fact that the interest rate remains high impacts fully on financial markets, including Bitcoin and cryptocurrencies, as explained by cryptootics. When this occurs, the cost of borrowing is also high and there is less liquidity in the system.
Apart from what happens on Friday, It is important to underline that the bullish perspectives for the price of the currency created by Satoshi Nakamoto continue. Among the reasons is that more and more companies are incorporating BTC into their corporate treasury as a reserve asset.
In addition, BTC -contained in stock extent (ETF) funds are having an outstanding performance. Last week, these financial instruments captured more than 880 million dollars.
In this regard, Willy Woo, professional trader and market analyst, Point out that the fall of more than $ 10,000 from its ATH is due to liquidations. In the futures market, when the price moves against leverage positions, exchanges automatically close these operations to avoid greater losses, which causes forced sales and accentuates falls.
For the analyst, the market has been “too speculative”, that is, with an excess of leveraged positions betting on fast climbs, which returns to the price much more vulnerable to sudden corrections.
However, there are signs that the price could initiate a recovery in the short term. On this point, Woo says: “The real question is: What are investors doing? The Risk Risk Signal (Macro Cycle Risk) is going down, indicating that the liquidity of investors is returning. If the trend continues, BTC is in excellent way to continue up. ”
The MCR (red line) is the risk of the macroeconomic cycle, an indicator that models the liquidity of the BTC market to identify entry and exit points in the upward cycles.
If the MCR indicator decreases, as is currently the case, it means that more liquidity is entering the system. Historically, each fall of the MCR has anticipated a strong upward movement in Bitcoin, which turns the recent price drop into an opportunity for many investors to acquire BTC at lower levels.
