{"id":21393,"date":"2023-08-21T09:48:46","date_gmt":"2023-08-21T09:48:46","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/most-fear-since-svb-collapse-5-things-to-know-in-bitcoin-this-week\/"},"modified":"2023-08-21T09:48:48","modified_gmt":"2023-08-21T09:48:48","slug":"most-fear-since-svb-collapse-5-things-to-know-in-bitcoin-this-week","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/most-fear-since-svb-collapse-5-things-to-know-in-bitcoin-this-week\/","title":{"rendered":"Most fear since SVB collapse \u2014 5 things to know in Bitcoin this week"},"content":{"rendered":"
\n

Bitcoin (BTC) starts a new week with traders licking their wounds after a 10% snap crash.<\/p>\n

BTC price action is struggling to recover from a manic end to the days prior to the weekend, and the fear is palpable going into what could turn out to be an equally volatile few days.<\/p>\n

With $26,000 so far forming the focus for the markets, theories are brewing over where Bitcoin might head next.<\/p>\n

Multiple factors are set to converge to provide some influence \u2014 United States macro data prints are firing up again, while the Federal Reserve will deliver key commentary on the economy at the annual Jackson Hole Economic Symposium.<\/p>\n

Within Bitcoin, meanwhile, short-term holders now face increasing unrealized losses, and on-chain transactions in loss are setting multi-year highs.<\/p>\n

Sentiment is back on the floor, but is the fear really justified?<\/p>\n

Cointelegraph takes a look at these topics and more ahead of what promises to be an interest week for crypto markets.<\/p>\n

BTC order book “ghost town” after OI obliterated<\/h2>\n

While many expected volatility to kick in around the Aug. 20 weekly close, Bitcoin in the end produced something of a non-event, data from Cointelegraph Markets Pro and TradingView\u00a0shows, with\u00a0$26,300 capping the extent of its upside.<\/p>\n

A subsequent comedown took the market back to the $26,000 mark, where it traded at the time of writing.<\/p>\n

BTC\/USD 1-hour chart. Source: TradingView<\/em><\/figcaption><\/figure>\n

After a week of mayhem, traders and analysts alike remained highly cautious on the outlook, with sources referencing various triggers for new downside.<\/p>\n

\u201cTraders still spooked, expecting more downside,\u201d trading suite Decentrader wrote<\/a> in an X update on Aug. 21.<\/p>\n

Decentrader noted that traders were positioned short across exchanges after a major open interest wipeout during last week\u2019s drop.<\/p>\n

\u201cFunding rates continue to be negative,\u201d it added.<\/p>\n

Maartunn, a contributor to on-chain analytics platform CryptoQuant, described<\/a> Binance order book liquidity as a \u201cghost town.\u201d<\/p>\n

\u201cThis will open the door for volatility, in case you’ve missed it,\u201d he suggested, alongside a chart showing liquidity and whale order volumes from monitoring resource Material Indicators.<\/p>\n

BTC\/USD order book data and whale volume for Binance. Source: Maartunn\/X<\/em><\/figcaption><\/figure>\n

Maartunn nonetheless reasoned that upside could come as a result, given historical precedent.<\/p>\n

\u201cIn the entire history of Bitcoin, there were 11 times when Open Interest had a similar decline as three days ago. Among these eleven, eight led to increased prices, whereas three did not,\u201d part of a separate analysis stated<\/a>.<\/p>\n

As Cointelegraph reported, overall long and short liquidations reached levels comparable to the aftermath of the November 2022 FTX implosion.<\/p>\n

Bitcoin traders weigh “consolidation scenario”<\/h2>\n

The quiet weekend gave some traders pause for thought. Bitcoin, they argued, might now open the door to a new phase of rangebound trading.<\/p>\n

\u201cBitcoin fell off back into the previous range. Most likely outcome for next week is to keep trading the range imo,\u201d popular trader CrypNuevo told<\/a> X subscribers. <\/p>\n

\u201cI would like to see a false move to the downside to $25700-$25800 on Monday and then a relief bounce the rest of the week till mid-range $27k.\u201d<\/p><\/blockquote>\n

BTC\/USD annotated chart. Source: CrypNuevo\/X<\/em><\/figcaption><\/figure>\n

Fellow trader Crypto Tony eyed a reclaim of the weekend\u2019s $26,300 local top as a call to action.<\/p>\n

\u201cUntil then i am sitting on hands waiting for Bitcoin next move,\u201d he concluded<\/a>.<\/p>\n

Maartunn likewise acknowledged that a consolidation period for BTC\/USD was \u201cnot unlikely.\u201d<\/p>\n

\n

Another possible scenario for #Bitcoin<\/a> is a period of consolidation.<\/p>\n

This is not unlikely, as we have witnessed such consolidation multiple times in the past following significant market movements.https:\/\/t.co\/pfl62msjJm pic.twitter.com\/1jeRb6eJfL<\/a><\/p>\n

\u2014 Maartunn (@JA_Maartun) August 20, 2023<\/a><\/p><\/blockquote>\n

On weekly timeframes, trader Skew outlined upside, downside and consolidation scenarios all being possible.<\/p>\n

\u201cConsolidation scenario is chopping between $25K & $30K ~ long term range,\u201d he confirmed<\/a> alongside an illustrative chart.<\/p>\n

BTC\/USD annotated chart. Source: Skew\/X<\/em><\/figcaption><\/figure>\n

Key timing for Powell’s Jackson Hole speech<\/h2>\n

While last week was quiet in terms of United States macroeconomic data releases, the coming five days promises a key change of tempo.<\/p>\n

U.S. jobless claims will hit on Aug. 24, with home sales and other data preceding them.<\/p>\n

\u201cVolatility is officially back,\u201d financial commentary resource The Kobeissi Letter summarized to X subscribers.<\/p>\n

\n

Key Events This Week:<\/p>\n

1. Existing Home Sales data – Tuesday<\/p>\n

2. US Services PMI data – Wednesday<\/p>\n

3. New Home Sales data – Wednesday<\/p>\n

4. Core Durable Goods data – Thursday<\/p>\n

5. Initial Jobless Claims – Thursday<\/p>\n

6. Fed Chair Powell Speaks – Friday<\/p>\n

Volatility is officially back.<\/p>\n

\u2014 The Kobeissi Letter (@KobeissiLetter) August 20, 2023<\/a><\/p><\/blockquote>\n

Traders and analysts, however, have their eyes mostly set on Jerome Powell, Chair of the Federal Reserve, who will take to the stage at the annual Jackson Hole Economic Symposium on Aug. 25.<\/p>\n

Jackson Hole is a classic venue for market volatility, and given the current climate, this year\u2019s event should be no exception.<\/p>\n

\u201cThe Fed’s annual Jackson Hole meeting is more important than ever this week,\u201d Kobeissi added.<\/p>\n

Powell will be joined by speakers including Christine Lagarde, Chair of the European Central Bank (ECB).<\/p>\n

With both the Nasdaq and S&P 500 joining crypto in a week of losses, historical patterns could still turn the tables as Jackson Hole traditionally provides risk-on relief.<\/p>\n

\n

More often than not, stocks rise the week after Jackson Hole<\/p>\n

Will this year follow the pattern, or will it be one of the outlier years with a sell-off? pic.twitter.com\/QPST4p9HUs<\/a><\/p>\n

\u2014 Markets & Mayhem (@Mayhem4Markets) August 20, 2023<\/a><\/p><\/blockquote>\n

Popular trader and analyst Miles Johal was also hopeful, noting that unlike stocks and Bitcoin, U.S. dollar strength faced an uphill struggle.<\/p>\n

\u201cSPX – Uptrend, at support and oversold. BTC – Uptrend, at support and oversold. DXY – Downtrend, at resistance and overbought. US10Y – Double top pattern, at resistance and overbought,\u201d he explained<\/a> to X subscribers. <\/p>\n

\u201cLining up very clearly. $BTC and Equities bias is vertical up after the correction is over.\u201d<\/p><\/blockquote>\n

Macro asset comparison annotated chart. Source: Miles Johal\/X<\/em><\/figcaption><\/figure>\n

Kobeissi meanwhile added that the equity put\/call ratio had reached its highest since the start of 2023, suggesting a volatile move would soon hit.<\/p>\n

\u201cAre markets bracing for a major pullback or is another short squeeze about to begin?\u201d it queried<\/a>.<\/p>\n

On-chain losses mount as speculators feel the pressure<\/h2>\n

It will come as little surprise that Bitcoin\u2019s 11% drop engendered a considerable shake-up in on-chain profitability metrics.<\/p>\n

Among these is the adjusted Spent Output Profit Ratio (aSOPR), which tracks aggregate profitability of all transactions, excluding those with an age of one hour or less.<\/p>\n

This \u201cprice sold versus price paid\u201d ratio is now back below 1, the barrier between profit and loss, to hit its lowest levels in five months, per data<\/a> from on-chain analytics firm Glassnode.<\/p>\n

Bitcoin aSOPR chart. Source: Glassnode\/X<\/em><\/figcaption><\/figure>\n

Glassnode also revealed<\/a> a three-year high in the seven-day average number of unspent transaction outputs (UXTOs) in loss.<\/p>\n

Bitcoin UTXOs in loss chart. Source: Glassnode\/X<\/em><\/figcaption><\/figure>\n

At that time, BTC\/USD was seeing another August retracement \u2014 one that was nonetheless short lived, with September seeing its final visit to $10,000 before launching to new all-time highs later in 2020.<\/p>\n

Speculators were on the receiving end of most of the pain this time around, with Bitcoin currently trading below the cost basis, or realized price, of short-term holders (STHs) \u2014 entities holding BTC for under 155 days.<\/p>\n

Bitcoin hodler cohort realized price chart. Source: Glassnode<\/em><\/figcaption><\/figure>\n

Familiar fear<\/h2>\n

Could Bitcoin in fact not be as weak as the market makes out?<\/p>\n

Related:\u00a0Bitcoin on the way to ‘bearadise?’ $20K is back as a BTC price target<\/em><\/strong><\/p>\n

Sentiment data suggests a knee-jerk reaction as the defining response to recent BTC price action \u2014 and the dust may be yet to settle.<\/p>\n

According to the Crypto Fear & Greed Index, the average crypto investor is more scared now than at any time since the Silicon Valley Bank (SVB) collapse in March.<\/p>\n

At just 38\/100, \u201cfear\u201d is firmly in command as the new week begins, with Fear & Greed dropping 16 points over the past seven days.<\/p>\n

Crypto Fear & Greed Index (screenshot). Source: Alternative.me<\/em><\/figcaption><\/figure>\n

Among those calling for a more balanced take on the status quo, meanwhile, is trading team Stockmoney Lizards. BTC price performance regularly encounters the kind of drawback seen last week, it argued, making this month nothing new.<\/p>\n

\u201cBitcoin sell off and everyone is yelling 10k,\u201d it summarized<\/a> at the weekend, commenting on a comparative chart of price action in the current halving cycle versus its previous one.<\/p>\n

\u201cThe history of BTC is lined with such sell offs and the market will recover from it as it did in the past.\u201d<\/p><\/blockquote>\n

BTC\/USD comparative chart. Source: Stockmoney Lizards\/X<\/em><\/figcaption><\/figure>\n

Popular trader and analyst Rekt Capital went into further detail, noting several 20%+ drawdowns in 2023 alone on BTC\/USD.<\/p>\n

\n

All #BTC<\/a> pullbacks in 2023:<\/p>\n

\u2022 Early February -12%<\/p>\n

\u2022 Late February -22%<\/p>\n

\u2022 March -9%<\/p>\n

\u2022 April to June -20%<\/p>\n

\u2022 July to August -12%$BTC<\/a> #Crypto<\/a> #Bitcoin<\/a> pic.twitter.com\/4pmBXPY0fp<\/a><\/p>\n

\u2014 Rekt Capital (@rektcapital) August 17, 2023<\/a><\/p><\/blockquote>\n

Data from monitoring resource CoinGlass puts August 2023 losses at -10.8% as of Aug. 21.<\/p>\n

BTC\/USD monthly returns table (screenshot). Source: CoinGlass<\/em><\/figcaption><\/figure>\n

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.\n<\/p>\n<\/div>\n