Bitcoin (BTC) starts a pivotal week on a firm footing as bulls succeed in wiping out weeks of losses.
After closing the latest weekly candle at $21,800, its highest since mid-August, BTC/USD is back on the radar as a long bet.
The end to an extended period of downside interspersed with sideways price action now appears firmly at an end, with volatility expected to form a major theme in the coming days.
In fact, few weeks in Bitcoin’s history have been as hectic as this one is likely to be.
In addition to the Ethereum (ETH) Merge on Sep. 15, the United States inflation trend will come under scrutiny on Sep. 13 with the release of August Consumer Price Index (CPI) data. The recipe for unpredictability is there.
How will Bitcoin weather the storm? While the macro picture looks muddy for risk assets as the U.S. dollar surges, on-chain data continues to point to a price bottom already in the making.
In addition, Bitcoin’s network fundamentals are poised to hit new all-time highs this week, underscoring miner resilience and recovery, along with conviction over profitability.
Cointelegraph takes a look at several of the main areas to watch as Bitcoin gives “Septembear” a run for its money.
Solid weekly close boosts short-term BTC bets
The latest weekly close provided some much-needed relief for Bitcoin bulls.
After weeks of miserable performance, BTC/USD finally managed to seal a convincing week’s gains, even avoiding a last-minute correction into the candle close, data from Cointelegraph Markets Pro and TradingView shows.
BTC/USD 1-week candle chart (Bitstamp). Source: TradingView
As such, at just above $21,800, the Sep. 11 event formed a solid foundation for a week due to deliver considerable volatility.
At the time of writing, that level is forming a consolidation zone, coinciding with an important trendline in the form of Bitcoin’s realized price. According to on-chain analytics firm Glassnode, this currently sits at approximately $21,770.
Bitcoin realized price chart. Source: Glassnode
BTC/USD has yet to tackle more significant bear market levels lost as support last month, chief among them the 200-week moving average, which is now near $23,330.
A spike to $22,350 on Bitstamp overnight nonetheless caught traders’ attention, furthering existing calls for upside to continue.
“This just was preliminary supply at 22300,” popular Twitter account Il Capo of Crypto wrote in one of several recent updates.
“Still thinking 23k is likely. Then we see reversal.”
A further tweet nonetheless cautioned that “major resistances” are now coming into play across Bitcoin and altcoins.
“In my opinion, we see a last leg up of 5-7% soon, then ltf distribution, then nuke. Get ready,” it stated.
In a sign of the coming volatility beginning, fellow trader Cheds noted that Bitcoin tagged its upper Bollinger Band on daily timeframes, the bands now slowly spreading to make way for a wider trading range.
BTC/USD 1-day candle chart with Bollinger Bands. Source: TradingView
Inbound CPI combines with dollar nosedive
One of the two main talking points for the week in BTC price action comes from a familiar source: the United States Federal Reserve.
CPI data is due for August, and hopes are resting on the decreasing inflation trend continuing after July’s print showed a peak having formed.
“One thing which makes me doubt my downside bias for Bitcoin & Crypto in general post the ETH merge even, is DXY,” analyst Mark Cullen, creator of trading resource AlphaBTC, revealed.
“We see potential for 3 drives of [bear] divergence formed on the RSI & the Sept FOMC is next Wed. I wonder if we see $DXY break the parabola & push risk assets up.”
Phoenix Copper executive Donald Pond meanwhile called the USD and DXY chart “the most important out there.”
“The dollar is far too strong atm, and has been killing everything else,” he tweeted on the day.
“It’s dropped quickly over last few days, but is still in a strong uptrend. No sustainable bounce for markets until trend breaks.”
U.S. dollar index (DXY) 1-day candle chart. Source: TradingView
The Merge is here!
Complementing the encouraging inflation data is a purely internal price trigger — the Ethereum Merge, due around Sep. 15.
The event, now set to become reality after months of uncertainty, sees Ethereum as a network transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) as its hashing algorithm.
Hype has been building on social media and beyond, and now, analysts are wondering what the immediate aftermath will be — specifically, whether investors will “sell the news” and bring markets lower immediately once the Merge completes.
Crypto profit-taking annotated chart. Source: Santiment/ Twitter
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