‘Final week of the bear rally’ — 5 things to know in Bitcoin this week

Bitcoin (BTC) enters a new week with a bang after sealing its highest weekly close since mid-June — can the good times continue?

After a volatile weekend, BTC/USD managed to restrict losses into the later portion of the weekend to produce a solid green candle on weekly timeframes.

In what could shape up to be the last “quiet” week of the summer, bulls have time on their hands in the absence of major macro market drivers involving the United States Federal Reserve.

Fundamentals remain strong on Bitcoin, which is due to an increase in its mining difficulty for the second time in a row in the coming days.

On derivatives markets, encouraging signs are also present, with higher price levels accompanied by bullish data over sentiment.

The question for hodlers now is thus how robust the rally is and whether it is just that: a bullish countermove within a broader bear market.

Cointelegraph presents five factors which may influence price this week and help decide on Bitcoin’s next steps.

Bitcoin embraces volatility after multi-week high close

At around $24,300, the Aug. 14 weekly close was the best in two months for BTC/USD.

The weekly chart shows a steady grind upwards continuing to take shape after the June lows, and last week’s candle totaled around $1,100 or 4.8%.

An impressive move by 2022, the gains sparked some volatility overnight into the first Wall Street trading day of the week, BTC/USD continuing to hit $25,200 on exchanges before reversing noticeably under the weekly close level.

Such moves characterized recent days, leading to little surprise for traders who continue to act cautiously on shorter timeframes.

“A new week begins, with the bears stepping in so far to retest some key levels,” popular trading account Crypto Tony summarized in part of his latest Twitter update on the day:

“Once again, we should see an interesting week with price action. Been all over the shop on the lower time frames.”

Should unpredictability keep coming, the chances of a downmove are clear, according to on-chain monitoring resource Material Indicators.

Following the close, the weekly chart began signaling “downward momentum,” it warned, while daily timeframes were “flat” as per its proprietary trading tools.

Its creator, Material Scientist, described this week as the “final week of the bear rally” in his own comments.

Still entertaining a much deeper correction — perhaps unsurprisingly — was gold bug Peter Schiff, who maintained that $10,000 was still on the cards.

Just to put the #Bitcoin rally into perspective, take a look at this chart. The pattern remains very bearish. There’s both a double top and a head and shoulders top. There’s a rising wedge forming below the neckline. At a minimum support will be tested below $10K. Look out below! pic.twitter.com/OHNhwsgxxs

— Peter Schiff (@PeterSchiff) August 14, 2022

On a longer-term basis, however, fellow trader and analyst Rekt Capital was calm on BTC price action.

A spot price below $25,000, he said, should be used to dollar cost average (DCA) into Bitcoin — buying a set amount per set period — until the next block subsidy halving event in 2024.

“To succeed in Crypto, you need a dollar-cost averaging strategy, an investing thesis, a vision, & patience,” he told Twitter followers over the weekend:

“My DCA strategy is anything sub $25000. My thesis is based on the 2024 Halving event Vision is seeing Bull peak a ~year post-Halving. Now I’m just patient.”

Macro remains on a “knife edge”

After last week’s United States inflation print, the coming five trading days look comparatively calm from a macro perspective.

The Fed is quiet, leaving only unexpected events in Europe or Asia to impact market performance.

The likelihood of crypto continuing knee-jerk reactions to macro triggers beyond inflation could already be lower than many think, however, according to one popular analyst.

In a fresh market update for his trading suite, DecenTrader Filbfilb eyed decreasing correlation between BTC and what he called “legacy markets” more broadly.

“Bitcoin was following a high correlation with legacy markets as shown below with the S&P500 in white and NASDAQ in blue, however since reaching the most recent bottom, all of the downside on the legacy markets has been regained and Bitcoin has failed to follow suit,” he wrote alongside a comparative chart.

Since June’s $17,600 lows, Bitcoin has not in fact rallied as strongly as its prior correlation would dictate, Filbfilb added, arguing that spot price should be above $30,000.

The reason lies in the Terra and Celsius debacles, providing something of a perfect storm if taken in tandem with concerns over inflation and the Fed’s reaction to it.