This week, Bitcoin experienced significant volatility amidst important political and economic events, but today, the digital asset rebounded above $58,000.
BTC Signals: Short and Long Term
At the moment of writing this article, BTC rebounded and it’s trading above $58,000, up by over 2% today. On September 11, when the US commemorated the 9/11 attacks, the price of Bitcoin hit lows near $55,500 ahead of a reversal recorded today. On-chain analyst Willy Woo analyzes BTC-specific signals that are worth watching at the moment. According to his new post on X today, three signals are important: 1. Short-term: The timing signal shows 1 to 3 weeks of bullish swing. 2. Medium-term: Demand/supply has been bearish since April’s halving event, but a reversal pattern may have started in the past 4 weeks, which means that it can take more time until a new ATH. 3. Macro: Risk signal printing lower lows; BTC is not in a bear market, it’s just waiting in a re-accumulation pattern.
TradFi Risks
Woo also highlighted a TradFi risk, noting that bond rates are dropping and this can be a “bad omen” of staving off a potential crash. He offered as examples past events such as the 2020 Covid crash and the 2008 WFC. In past cases, this led to a crash before a long-term liquidity-fueled rally in all asset classes. He also mentioned the US money-printing spree in this regard. Yesterday, the August CPI data was released, showing eased inflation which fueled the rate cut expectations. The next week will mark a potential US Fed rate cut which could affect Bitcoin and the crypto market according to the results.
Current Bitcoin Cycle’s 4 Stages
According to the popular trader and investor, Daan Crypto, the current cycle can be defined in four stages: 1. Rally: January 2023 to April 2023 2. Consolidation: April 2023 to September 2023 3. 2nd Rally: September 2023 to March 2024 4. 2nd Consolidation: March 2024 to present According to his notes, most of the gains in the current cycle were in relatively short few-month periods. Both 2023 and 2024 were recorded over 6 months of chop/bleed/consolidation. He notes that this is the reason for which timing the market is hard. According to him, if you sell with the idea of buying back lower, you might end up being sidelines for one of the violent moves up. On the other hand, if you try to allocate or leverage up for the big move too early, there’s a high chance you get chopped up.
Bitcoin continues to display volatility amidst external factors and market forces. Investors and traders should closely monitor signals and risks to make informed decisions.
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