Is crypto entering a bear market? – 5 things to know in Bitcoin this week

Bitcoin (BTC) begins a new week struggling to maintain key support as markets prepare for a flood of macroeconomic volatility triggers.

BTC/USD holds a weekly close of $54,000, giving traders some confidence in how short-term BTC price action will shape up. CPI and PPI lead a key week of US macro data releases, which come less than ten days ahead of the Fed's interest rate cut. Verdict. Crypto funds poured in $600 million last week. Bitcoin ETFs in the space are also seeing steady net inflows. BTC's price performance looks “very similar” to 2019, according to Fractal, which operates throughout the year. Bulls Are Watching BTC/USD is 20% bullish as a sliding channel continues in place from March all-time high.

BTC price losses echo the “Rektember” level

Unlike the past few weeks, Bitcoin managed to avoid a significant selloff near the close of the week.

Data from Cointelegraph Markets Pro and TradingView instead indicate that $55,000 is currently on the bulls' radar.

“If the price can hold above $54.5k, I'm looking for a break above this green zone to see if Bitcoin can find some upside,” noted analyst Caleb Franzen commented in one of his chart-side posts on X.

Monitoring input data shows the number of requests CoinGlass will add to the environment at around $55,500. In X's own post, CoinGlass himself said he hoped it would continue to rise.

“$52,500 should be held to continue in the short term,” concluded popular crypto trader Tony about the support levels.

“The next few weeks are exciting.”

However, BTC/USD is down 7% in September, in line with historical norms.

“Bitcoin is in half a year. So it makes more sense to compare 2024 with the previous half years,” argued prominent trader and analyst Rect Capital when discussing the performance numbers.

“In the past half-years (2016 and 2020), Bitcoin had three consecutive months of support in October, November and December.”

The CPI is ahead of a key Fed rate cut decision

A big week of US macroeconomic data ahead of the all-important Federal Reserve interest rate decision on September 18.

The coming days will see both the Consumer Price Index (CPI) and Producer Price Index (PPI) numbers for August, along with additional unemployment numbers.

While last week saw the latter risk-asset responses, now, markets are looking for any last-minute surprises that could change bets on what the Fed will do next.

“This is the last inflation data before the long-awaited September Fed meeting,” Business Resource wrote in part of the latest X posts on the topic of the Kobeissi Letter.

Kobeci noted that US stocks have suffered since the month, with Bitcoin and altcoins largely underperforming.

“September 2024 still doesn't look like a single green day in the S&P 500, a good trading setup,” he added.

The latest estimates from CME Group's FedWatch Tool show that markets still favor a more moderate interest rate cut — 25 basis points rather than 50. However, this may change when the macro data is imported.

Kobeisi, for his part, is among those who argue that the Fed will not be surprised by the change.

“Both a 50 bps rate cut and an emergency cut are not needed as we have been talking for weeks now,” he wrote last week after unemployment data.

“With the labor market collapsing, the Fed should avoid moving too quickly again. The Fed has a tough road ahead.”

Crypto institutional investment sees a “red” week

The past week has not been kind to crypto institutional investment products as capital flees the sector.

In a particularly bearish market review, the Bank of America (BoA) has revealed the worst crypto-fund outflow since the 2022 bear market.

Around $600 million in the past week alone, this Kobeisi notes, thus representing the second largest such flow in the history of the industry.

“In the past few weeks, crypto funds have seen a significant outflow from Q1, with weekly inflows up to $3.3 billion,” the X Post reported.

“Appetite risk in crypto appears to have dissipated even as the Fed is expected to cut rates this month.”

The picture is similarly grim for US space Bitcoin exchange-traded funds (ETFs), which recorded daily net inflows last week.

Two of the four trading days saw net inflows of more than $200 million, according to data from UK-based Farside Investors.

“Bitcoin is down ~15% in the last two weeks and is trading ~25% below its all-time high,” Kobeisi said.

“Are Crypto Markets Entering a Bear Market?”

The comparison of Bitcoin 2019 has come to a “critical time”.

BTC's current price action is drawing comparisons to as far back as 2019 – before two bans.

Then, BTC/USD saw a long-term high halfway through the year before consolidating until Q4 2020. During that time, the covid-19 cross-market saw a collapse.

For Julian Bittel, head of macro research at Global Macro Investor, history is now repeating itself.

“This year's Bitcoin price structure is starting to look a lot like 2019… look closely at the chart – it's an absolute fraction of what we saw then,” he told X followers over the weekend.

“Bitcoin is stuck in a consolidation phase, and surprisingly, as of 2019, this consolidation has lasted exactly 175 days (so far). We are now approaching a critical period where things can move dramatically.”

The fractal in question suggests BTC/USD may be due for an “inflection point” in the near future and a return to the upside that should last.

“Next week will be incredibly important to watch,” he summed up.

Cointelegraph recently reported on another 2019 comparison from crypto analyst and entrepreneur Michael van de Popp, who similarly sees Bitcoin's prospects just around the corner.

Prominent trader Peter Brandt has warned that BTC/USD has behaved very slowly since the most recent halving events in March.

respecting the channel

More short-term hope for Bitcoin bulls comes courtesy of a simple retracement channel this week.

Related: Bitcoin range acquisition can increase UNI, SUI, OP and HNT

As suggested by renowned analyst Caleb Franzen, BTC/USD is currently challenging the lower boundary of the channel it has held since mid-March and the support at the all-time high of $73,800.

The channel summarizes the six months of consolidation seen since then – and even a dip below $50,000 in early August wasn't enough to wipe out the price.

“Bitcoin just had its 4th daily close below the regression channel,” Franzen confirmed on September 7, identifying three other similar instances.

He noted that a recovery is not guaranteed by such daily closes alone, as the previous three cases all saw BTC price rise “at least” 20 percent.

Here, a repeat performance would see a trip to $65,000 – itself covering a key technical area for Bitcoin, which is host to the overall cost base for short-term holders.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.