After a start to the week that suggested a market plunge of such magnitude that it would not only lead us into correction territory but into a bear market, we experienced a rapid swing and a recovery that made it seem as though nothing had happened. Both the S&P 500 and Bitcoin, along with other risk assets, felt the threat of a recession or, worse, the need for interest rates to remain high for a longer period. Markets can digest anything; both positive and negative events are processed, but if there is one thing they dislike, it is uncertainty.
The perception is that Jerome Powell, the Chair of the US Federal Reserve, has reacted too late and should have accelerated the rate cuts months ago, which has brought uncertainty to the market. We are at a critical point, and the upcoming week is decisive: the CPI data release on Wednesday, September 14th, which measures inflation in the US, it's the fine thread needed to complete the weaving of the interest rate policy for September.
Bitcoin continues to set the trend for crypto assets, and although the risk remains high, it's remarkable how, despite a correction that broke the lower part of its long-term range, it gained momentum from the interest of strong hands in Bitcoin, which continues to accumulate. It's curious how a wave of critics chime in unison each time Bitcoin falls, "We told you so!" Yet when it rises and recovers, they suddenly fall silent. The problem is they fail to consider Bitcoin's fundamentals, which, as we see in the indicators, and despite last week's correction and changing its status from bullish to neutral, we consider it to remain strong and healthy.
Speedometers indicating the current state of BTC. The full dot represents the current reading and the white dot represents one week ago.
A closer look at the fundamentals.
Bitcoin's fundamentals have been hit, moving from the bullish trend of recent weeks to neutral territory, but they still maintain the strengthening trend that began in late June. The question now is whether we see signs that this trend will continue to strengthen and consolidate or if it will weaken and start a decline in the short term.
If Bitcoin retests the liquidity wick on the weekly timeframe and we observe that the Bitcoin Fundamental Index (BFI) embarks on an upward course, this will be a good sign of strengthening fundamentals. This indicates robust liquidity and the presence of new market participants entering the scene.
A further decline in fundamentals, meaning lower network liquidity and growth, could make Bitcoin more sensitive to negative external factors again, such as a negative news stream and poor equity performance.
Time series of Swissblock’s Bitcoin Fundamental Index (BFI)
Where did the greed go?
In July, we noted the rapid onset of euphoria in market sentiment and how fear took much longer to have an impact. That same month, we saw how, after falling to $53k and breaking $60k ten days later, we quickly approached levels of extreme greed again. This time, however, the pattern has been different and more in line with the typical sentiment patterns we are accustomed to, featuring more prolonged stays in the territory of fear.
This indicates that investors are exercising
Unlock this post for free, courtesy of Swissblock Insights.
Hello guys and welcome to my blog, I tried to find one working faucet collector crack and here it is. Just download this crack, install d...
No comments:
Post a Comment