After breaking through the key support level at $20.8k, the price of Bitcoin is consolidating around $20k. Over the past weekend, uncertain Doji candles formed on the cryptocurrency daily chart, which clearly underlines the low trading volumes. The price of Bitcoin has been in the consolidation phase for more than two weeks, and a certain category of investors is successfully collecting liquidity from different price ranges. We can say that the BTC/USD quotes have found a strong bottom near the $19.5k mark. Therefore, the exit from the consolidation range should occur in an upward direction.
In addition to confidently defending an important price level, fundamentally positive news has appeared on the market, which can become a catalyst for the growth of Bitcoin. The US unemployment rate rose to 3.7% against the forecast of 3.5%. The labor market is one of the main factors confirming the recession of the American economy. Consequently, the Fed may revise monetary policy or make local easing to stabilize the situation on the labor market. In addition, mining difficulty increased by 10% in August, which indirectly confirms that the energy crisis has been overcome. Santiment also confirms the persistence of buying sentiment in the market. The number of wallets with a balance of 100–10,000 BTC continues to grow.
Given this, it is likely that Bitcoin is expecting a local upward spurt. However, the technical metrics on the daily chart continue to point to a lack of buying interest. The stochastic oscillator has been in the oversold zone since August 18, which indicates the absence of bullish impulses and buying volumes. As of September 5, the metric has formed another bearish crossover. The RSI metric is also moving in a downward direction. Given the deplorable state of technical metrics, the question arises: why is the price not falling, but consolidating?
The main problem lies in the trading activity of buyers. The indicator is at the very bottom, which does not allow the price to reach local highs. At the same time, sales volumes are also at a low level, which is why the bears are not able to break through key support areas without the influence of fundamental factors. In other words, at the current stage of the market any significant price movement of Bitcoin is tied to external factors. It is also important to consider the Monday factor, when the main markets are just warming up before the start of the trading week. Given this, we can expect an attempt by Bitcoin to climb above $20k by the end of today's trading day. However, there are problems here as well.
The bitcoin headache of miner capitulation continues. The industry has adapted to new realities and energy prices, but low market liquidity is forcing them to sell off their stocks. Miners have sold over 3,000 BTC over the past week, which will negatively impact Bitcoin's short-term bullish targets. In addition, there are warns that the market is pricing in a 70% chance of a 70 bps interest rate hike in September. There are plenty of restraining factors for the growth of Bitcoin, therefore it is not worth hoping for a successful implementation of the bullish impulse.
However, the situation may change next week. On September 13, statistics on inflation will be published, and the continuation of the downward trend of the CPI may be a signal for the activation of buyers. Until then, Bitcoin has no significant prerequisites for growth. Most likely, buyers will continue to actively absorb the volumes of BTC that miners and short-term investors send to the market. Among the likely targets that BTC/USD could reach as part of the upward movement this week is the $20.8k level. However, for this, the price needs to consolidate above $20k in the next day or two. This idea will become irrelevant if the $19.5k level is successfully broken.
Relevance up to 10:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.