‘The bond market bubble has burst’ – 5 things to know in Bitcoin this week

Bitcoin (BTC) starts a new week looking at a wild macro environment after closing its lowest weekly close in over two years.

As riskier assets in the global economy take the hammer and the US dollar continues to rise, the biggest cryptocurrency is on a tricky footing.

September started on the bulls’ side with the crypto market’s now informal nickname – “September” – and BTC/USD is down 6.2% since the beginning of the month.

Bad news is coming for hodlers clinging to sleeper coins as the dollar continues to rise, and the appetite continues to shift to riskier plays.

As macro remains a key focus for everyone this week, Cointelegraph looks at what may be in store for BTC price action.

In economic conditions that rival the historical ups and downs of the past century or so, here are some things to consider when assessing where Bitcoin might be headed next.

The weekly close sends BTC/USD to November 2020

While not matching last week’s losses (3.1 percent and 11 percent), the past seven days nevertheless managed to close bitcoin’s lowest weekly since November 2020, according to data from Cointelegraph Markets Pro and TradingView.

As the downside loomed, Bitcoin turned back the clock before its breakout, taking longer than its previous half-cycle all-time high.

BTC/USD 1-week candlestick chart (Bitstamp). Source: TradingView

The sense of deja vu is undesirable for the average holler – most purchases and cold storage in the past two years are now underwater.

Noted Twitter analyst SB Investments said, “$BTC closes weekly low in this zone It is concluded After closing.

“It looks like it’s getting wrinkled with stocks looking to break support. On the other hand, this is what everyone expects.

Whether the markets can pull a Surprise “Extreme Pain” is a key alternative argument for Bitcoiners to move up, short bias liquidity. For popular trader Omz, the weekly close of $18,800 is a Persuasive local down.

RSI divergence has not gone unnoticed elsewhere with Trader Jackys. Pointing out It arrived last week.

“We’ve only had two touches of sold-out territory in the past and they’ve always marked the true bottom,” he tweeted.

Income trading account earnings sharks had expected a reversal in early November with the US mid-term elections, but fell short of saying the bottom had been reached.

“Elevator down, stairs up.” He commented On the 4-hour chart of the day.

“Continue to build double bottoms and new supports, midterm rally remains on the table. Break this structure, avoid these targets and find a new bottom.”

BTC/USD 4-Hour Candlestick Chart (Bitstamp). Source: TradingView

Dollar breaking ball price stocks, fiat

Monday hasn’t even started yet and the chaos of last week is taking its revenge on the macro markets.

An unstoppable US dollar is showing losses for major trading partner currencies, with bitcoin pound sterling falling 5% while its USD counterpart is within a few percentage points – its lowest level ever against the greenback.

GBP/USD tracks the euro below $1, but the woes forced Japanese authorities to hike the yen last week.

GBP/USD 1-day candlestick chart. Source: TradingView

EUR/USD fell below $0.96 before recovering modestly, while USD/JPY is near the highest level since the 1990s Japanese intervention.

At the same time, the fall to 2020 levels is ringing alarm bells for global bonds. Market analyst Holger Zesepitz warned With data from Bloomberg:

“It looks like the bond market bubble has burst. Global bond prices fell by another $1.2tn this week, bringing the total loss from ATH to $12.2tn.

Futures were lower on the day before Wall Street opened and stocks were set for better prices. Brent crude oil It fell below $85 a barrel for the first time in early 2022.

“Global bonds are collapsing in fiat currency, collapsing in dollar terms, rapidly losing purchasing power,” said Saifedian Amos, author of the popular books, “The Bitcoin Standard” and “The Fiat Standard.” They responded.

“It will be months and years before the average fiat user realizes how financially screwed they are. The new normal is poverty.

The outlook for Bitcoin is less than positive as the crypto is still highly correlated to equities and inversely correlated to the strength of the dollar, as the situation looks set to remain.

The euro area consumer price index (CPI) is due this week, and inflation is still expected to rise, while the publication of the US personal consumption expenditure price index (PCE), on the other hand, should continue the US decline that started in July.

The US Dollar Index (DXY) meanwhile shows no sign of a reversal, currently at its highest since May 2002.

US Dollar Index (DXY) 1 month candlestick chart. Source: TradingView

Hodlers in classic bear market mode

In such turmoil, it’s no wonder Bitcoin hodlers are increasingly judgmental and long-term investors are reluctant to sell.

Obstinate hoddling has been the hallmark of Bitcoin bear markets, and recent data suggests that this mentality has backfired this year.

According to on-chain analytics firm Glassnode, Bitcoin’s Coin Days Destroyed (CDD) metric is setting new lows.

CDD refers to how many dormant days BTC is removed from the host wallet after a certain period of time. When the CDD is higher, it indicates that more long-term accumulated coins are now on the move.

“The total number of Bitcoin coin-days destroyed in the last 90 days has, effectively, reached an all-time low.” Glassnode He commented.

“This suggests that coins held by HODL for several months to years are more dormant than ever.”

Bitcoin 90-Day Coin Days Destroyed (CDD) Detailed Chart. Source: Glassnode/Twitter

The news follows weeks of various hoard-specific metrics showing a determination to keep BTC supply under lock and key for better days ahead.

Glassnode, on the other hand, pointed out that the supply of BTC has increased the volume of US dollars for at least three months in the circulation of sealed coins.

“Bitcoin HODLers seem firm and unwavering in their beliefs”. agreed.

The accompanying chart showed a measure of Bitcoin HODL Waves – a display of the supply divided by the coin’s sleep.

Bitcoin HODL Waves Annotated Chart. Source: Glassnode/Twitter

Whales still commands support and resistance

As veteran hands move away from the “Sell” button, bitcoin’s high-volume investors are on analysts’ radars as they watch for price spikes.

The current trading range represents a zone of interest due to the volume of trading activity involving whale money in the past.

Larger purchases lend more weight to a certain support price, but resistance levels remain the same, and according to chain monitoring source Whalemap, BTC/USD is currently stuck between the two.

“Holding 19k-18k is key for $BTC,” says the Whalemap team. It is concluded Last weekend.

The accompanying chart shows the bearish resistance levels that will provide relief for Bitcoin and limit them in the $20,000 zone.

Bitcoin Well Resistance Annotated Chart. Source: Whalemap/Twitter

However, separate figures from the research firm Sentiment confirm that whales BTC’s overall exposure has fallen to a two-year low.

Bitcoin Well Ownership Annotated Chart. Source: Sentiment/Twitter

“High Fear” enters its second week

Crypto market sentiment has been in “high panic” mode for over a week now, with the 2022 rules being known.

Related: 5 altcoins that can turn from stable to strong bitcoin price

As the Crypto Fear and Greed index measures overall crypto market sentiment, the average investor couldn’t feel more comfortable about the outlook.

As of September 26, Fear and Greed scored 21/100, with 25/100 for “Great Fear.”

Cold feet, which lasted for more than two months, is not new to the market this year.

Crypto Fear and Greed Index (screenshot). Source: Alternative.me

A potential silver lining could fall on social media demand, which saw a rebound in the coin over the weekend. It is mentioned.

For the first time since mid-July, $BTC was the topic of 26%+ of conversations among crypto’s top 100 assets in Twitter comments this week.

“Our backcheck for Bitcoin is 20%+ positive for the sector.”

Bitcoin social dominance explanatory chart. Source: Sentiment/Twitter

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business activity involves risk, you should do your own research when making a decision.