US gov’t shutdown looms — 5 things to know in Bitcoin this week

Bitcoin News

Bitcoin (BTC) starts the last week of September with a retest of $26,000 as a stubborn range persists.

An unimpressive weekly close sets the tone for the culmination of a traditionally lackluster month for BTC price action.

Having shaken off a hectic week of macroeconomic events, Bitcoin has plenty more to weather before September is over. United States gross domestic product figures for Q2 will come on Sept. 28, with Personal Consumption Expenditures (PCE) data following the day after.

The highlight, however, will likely come in the form of a speech from Jerome Powell, chair of the Federal Reserve, a week after it opted to hold U.S. interest rates at current elevated levels.

Inflation remains a major talking point into Q4, and Bitcoin still lacks direction as week after week goes by without a clear upward or downward trend emerging.

Will this week be different? The countdown to the monthly close is on.

BTC price weekly chart prints “death cross”

BTC price performance, while steady over the weekend, deteriorated after the Sep. 24 weekly close.

BTC/USD took a trip to $26,000, data from Cointelegraph Markets Pro and TradingView shows, with this level still managing to hold as support at the time of writing prior to the week’s first Wall Street open.

BTC/USD 1-hour chart. Source: TradingView

Eyeing the state of play on exchanges, commentators noted liquidations occurring for long and short BTC positions.

Bitcoin is still near two-week lows, bolstering arguments from already cautious analysts over what might come next.

Popular trader and analyst Rekt Capital continued to track what he suggested could be a repeat of previous BTC price behavior. 2023, he argued at the weekend, might end up looking just like 2019 — its counterpart from the last cycle.

“Bitcoin could follow the same bearish fractal from 2019 to drop lower in this Macro Range,” he suggested alongside a comparative chart.

In a subsequent debate on X, Rekt Capital put the potential fractal downside target at near $20,000.

BTC/USD annotated chart. Source: Rekt Capital/X

Keith Alan, co-founder of monitoring resource Material Indicators, meanwhile spied a so-called “death cross” on weekly timeframes.

Here, the falling 21-week simple moving average (SMA) has crossed under its rising 200-week counterpart — a phenomenon that highlights the comparative weakness of recent price action.

Uploading a chart showing a downside warning from Material Indicators’ proprietary price tools, Alan added that this would be invalidated should BTC/USD reclaim $26,500.

A more optimistic take came from trader and analyst Credible Crypto, who believed a rebalancing of market composition would result in a return to $27,000.

“We had clear, visible and confirmed accumulation occurring in the green square,” he commented on a chart, building on analysis from the weekend.

“This latest push down looks to be manipulation to the downside (red square) prior to expansion to the upside. 27k incoming imo.”

BTC/USD annotated chart. Source: Credible Crypto/X

September 2023 clings to “green” status

Despite the overnight weakness, Bitcoin remains in the black for September overall — a rare feat by historical standards.

The latest live data from monitoring resource CoinGlass puts BTC/USD up 0.8% month-to-date.

BTC/USD monthly returns (screenshot). Source: CoinGlass

While this seems modest compared to the volatility generally seen with the pair, September usually forms a bearish prelude to a more substantial upside traditionally seen in October.

2023 is thus still on track to be Bitcoin’s strongest September performance for seven years.

October, which is informally known as “Uptober” among hodlers thanks to coinciding with BTC and broader crypto gains, is already a talking point.

Michaël van de Poppe, founder and CEO of trading firm Eight, suggested the start of next month could provide the fuel for the total crypto market cap to break above the 200-week exponential moving average (EMA).

“Total market capitalization for Crypto fights the resistance here of the 200-Week EMA,” he told X subscribers late last week.

“I think it’s just a matter of time until we flip above it. Probably 1-2 weeks if Ethereum ETF Futures could be approved and Uptober begins.”

Total crypto market cap annotated chart. Source: Michaël van de Poppe/X

Bitcoin’s 200-week EMA continues to act as support and currently sits at $25,700.

PCE data, Fed’s Powell headline macro week

If last week’s macroeconomic events were not enough to induce significant volatility across Bitcoin and crypto markets, perhaps the month-end selection will have the desired effect.

Revised U.S. Q2 GDP precedes comments from Fed Chair Powell, as well as five other speakers, including Governor Lisa Cook, later on Sept. 28. Markets, as ever, will be closely watching the language used — especially by Powell — to determine how future economic policy might play out.

PCE data will come a day later; this is known to be one of the Fed’s preferred gauges for measuring inflation trends.

“Very busy week just as volatility has returned,” financial commentary resource The Kobeissi Letter summarized in an X outlook.

Prior to the data and Fed speakers, markets are pricing in a 75% chance that interest rates stay anchored at present levels at the next decision meeting in November, per data from CME Group’s FedWatch Tool.

Fed target rate probabilities chart. Source: CME Group

Waiting in the wings before that, meanwhile, is the threat of a fresh U.S. government shutdown over budget wrangling. Politicians have until Oct. 2 to avert one, notes pro-Bitcoin commercial litigator Joe Carlasare.

Analysis dismisses BTC exchange balance drop

Bitcoin available to buy on exchanges may be near its lowest levels since 2018, but this is no cause for celebration or even bullishness, one longtime analyst argues.

For Willy Woo, creator of the statistics platform Woobull, the “synthetic” nature of exchanges’ BTC balances means that their multi-year decline does not represent the BTC supply becoming more illiquid or scarce.

“Will buying up the inventory of BTC on exchanges moon the price? NO! This is a fallacy,” he told X subscribers in a thread at the weekend.

“This happened all through the 2022 bear. There’s no supply shock because synthetic BTC via futures markets added to inventory. The market made a bottom when futures markets relented.”

Bitcoin inventory on exchanges annotated chart. Source: Willy Woo/X

Woo argued that approving a Bitcoin spot price exchange-traded fund in the U.S. would go some way to “rectify” the problem.

Futures, he added, were the elephant in the room that skewed his perspective of the market at the start of 2022 before BTC/USD hit two-year lows of $15,600 in November.

“I saw the market bullish in early 2022 by reading on-chain (spot) flows as bullish, all the while the leviathan of futures impact was saying the opposite,” he admitted.

Bitcoin offers “fascinating” 2020 similarities

Regardless of near-term BTC price performance, some remain universally bullish when it comes to the overall health of Bitcoin this year.

Related: Bitcoin short-term holders ‘panic’ amid nearly 100% unrealized loss

Among them is the popular trader and analyst known as Moustache, who now believes that current levels could represent the last chance to “buy the dip” on BTC in 2023.

Uploading a chart comparing the status quo to that of 2020, Moustache additionally noted “fascinating” similarities in Bitcoin’s relative strength index (RSI).

He subsequently gave significance on the 200-week EMA holding as support.

“95% wait for lower prices that won’t happen.,” he wrote in part of the accompanying commentary, with another chart placing BTC/USD in an expanding “megaphone” structure.

BTC/USD annotated chart. Source: Moustache/X

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