Bitcoin (BTC) is starting the new week at around $63,000, but bear-market history continues to repeat with weekly close below a key long-term trend line.
Key points:
- Bitcoin has been trading in a range between $57,700 and $67,300, but last week’s close came with a drop below the key 200-week moving average at $64,216.
- Markets are pricing in near-70% odds of a hold by the Federal Reserve in September, as July meeting minutes are due this week.
- Japan Q2 GDP figures fall short of expectations at 1.1% as analysis warns of “global tightening” that could impact Bitcoin and risk assets.
Bitcoin sees weekly close below 200-week moving average
Bitcoin price action enjoyed a modest rebound after Sunday’s weekly close, seeing local highs of $63,655 on Bitstamp.
BTC/USD one-hour chart. Source: Cointelegraph/TradingView
Data from TradingView shows BTC/USD continuing to tread water as the week begins, failing to challenge either side of a narrow trading range.
Analyst Benjamin Cowen, however, drew attention to the fact that BTC/USD is now back below its 200-week simple moving average (SMA). As Cointelegraph reported, this moving average was a defining feature in the 2022 bear market, when it turned resistance in August before BTC entered its long-term bottoming phase.
“What is interesting is how in both summer 2022/2026, Bitcoin capitulated below the 200W SMA, then bounced, then gave it up in mid-August,” he wrote in a post on X.
BTC/USD one-week chart with 200 SMA. Source: Cointelegraph/TradingView
Commenting, trader and analyst Rekt Capital added that price had failed to reach his own weekly-close target of $63,220, thus positioning for further downside in future.
“A rejection from $63,220 would fully confirm the breakdown and send price lower within the current ~$58,000-$66,000 Range (blue-blue)” he told X followers alongside an explanatory chart.
BTC/USD one-week chart. Source: Rekt Capital on X.com
Fed minutes due amid policy dissent
Friday sees the release of preliminary Purchasing Managers’ Index (PMI) data for the manufacturing and services sectors. The data has recently been in an uptrend diverging from relatively weak employment figures, which have seen several months of downward revisions.
Last week’s Consumer Price Index (CPI) and Producer Price Index (PPI) releases, meanwhile, painted a softer-than-expected picture of US inflation trends. This sparked a rethink on future interest-rate hikes by the Federal Reserve.
The latest data from CME Group’s FedWatch Tool shows near-70% odds that the Fed will hold rates at their current 3.50-3.75% range, compared with 42% odds a month ago.
Fed target-rate probability comparison for September FOMC meeting (screenshot). Source: CME Group
“A pair of reports showing moderating inflation is helping keep the outlook for monetary policy from turning too hawkish,” trading resource Mosaic Asset Company summarized in analysis released on Sunday.
Mosaic noted that while CPI came in at 3.4% year-on-year, this was still far above the Fed’s 2% target — a goal that chair Kevin Warsh continues to state will be achieved. On Wednesday, the Fed will publish the minutes of its July meeting. Rate hikes were paused in the prior meeting with the largest split among officials over the move since 1970.
Last week, Cleveland Federal Reserve Bank president Beth Hammack, who was one of three dissenting voices calling for a 0.25% rate hike in July, questioned whether public patience would tolerate it if the return to 2% rates took several years.
“Maybe we’d get there, but if it takes another three to four years to get there, is that OK? Is that enough?” she said at an event with the Dayton Area Chamber of Commerce in Kettering, Ohio, quoted by Bloomberg.
Japan on the radar as GDP disappoints
Japan’s central bank is on the radar for risk-asset traders this week after Q2 GDP figures significantly missed expectations. Quarter-on-quarter and year-on-year GDP increased 0.3% and 1.1%, respectively — below the anticipated 0.5% and 2.0%.
The timing of the print comes as markets see the Bank of Japan (BoJ) hiking rates from current 1.0% levels in September amid surging bond yields and continued weakening in the yen. Previously, Cointelegraph reported on a rare joint intervention in yen currency markets by Japan and the US after JPY/USD weakened to new 40-year lows.
BoJ interest-rate probabilities (screenshot). Source: RateProbability
The GDP print, meanwhile, included the first drop in private consumption in eight quarters, signaling that existing stimulus measures were failing to prop up consumer confidence.
“The boost to consumption from policy measures is already fading, and inflation will increase in H2 as firms will pass on increased costs, deteriorating consumers’ purchasing power,” Norihiro Yamaguchi, lead Japan economist at Oxford Economics, told CNBC.
The yen avoided major volatility on the back of the GDP data, lingering near 159 per dollar on Monday.
USD/JPY four-hour…
cointelegraph.com