Home » Bitcoin US dollar hits new 20-year high — 5 things to know in Bitcoin this week Reading 7 min Views 15 A familiar tale of losing stocks and a surging greenback greets Bitcoin traders this week as $20,000 fails to sustain as support. Bitcoin (BTC) heads into the first week of September on a rocky road downhill after United States markets’ Jackson Hole rout. After the U.S. Federal Reserve reinforced hawkish comments on the inflation outlook, risk assets sold off across the board, and crypto is still reeling from the aftermath. A fairly nonvolatile weekend did little to improve the mood, and BTC price action has returned to focus on areas below $20,000. In so doing, multiple weeks of upside have effectively disappeared, and in turn, traders and analysts expect a retest of the macro lows seen in June this year. While all is now quiet regarding the Fed until the September rate hike decision, there is still plenty of room for upset as geopolitical uncertainty and inflation persist, the latter still increasing in Europe. However, as last week, Bitcoin appears fundamentally resilient as a network, with on-chain data telling a different story to price charts. Cointelegraph takes a look at five factors to consider when wondering where BTC/USD may head in the coming days. Spot price triggers $18,000 target Data from Cointelegraph Markets Pro and TradingView confirms no surprises for guessing what happened to BTC/USD into the latest weekly close. After a comparatively uneventful weekend trading period, the pair sold off considerably at the end of Aug. 28, resulting in the lowest weekly close since early July. A $2,000 red weekly candle thus sealed a miserable August for bulls, this following an initial $3,000 of losses the week prior. BTC/USD 1-week candle chart (Bitstamp). Source: TradingView With days until the monthly candle completes, the mood among analysts was understandably less than optimistic in the short term. “Hoping we can see a recovery this week but the way equities closed Friday doesn’t look so hot,” trader Josh Rager summarized to Twitter followers in part of a weekend update. Popular trading account Il Capo of Crypto nonetheless eyed the possibility for a brief squeeze to the upside before continuation of the downtrend. Noting negative funding rates implying derivatives market bias towards straight losses, he predicted that $23,000 could reappear first. “Much more people expecting 19k than those expecting 23k. Funding says it all. Also, there’s a lot of juicy liquidity above 21k. Squeeze those shorts,” he tweeted. Responding, trader Mark Cullen noted that traders were “adding more BTC shorts in the area between 20.1 and 20.3k.” “There is a nice inefficiency above there and another at around 20.9-21.1k. If it can break up it’s likely to be a fast move higher,” he added. Amid various calls for $17,000 or lower, technical analyst Gert van Lagen gave a $17,500 floor target for the daily chart. $BTC[1D] White C-wave scenario I showed last Monday played out like clockwork. Double test of green box on daily. C-wave looks final, time to bounce 🚀 Invalidation: 17.5k#BullMarket #Bitcoin https://t.co/acs6bFEl66 pic.twitter.com/DkhXmp3GDc — Gert van Lagen (@GertvanLagen) August 28, 2022 In a slightly less cautious outlook, TMV Crypto meanwhile flagged $18,400 as a high-timeframe area of interest. Traders prepare for further U.S. stocks declines Last week’s bombshell of a speech by Fed Chair Jerome Powell sent shockwaves through risk assets worldwide. According to one tally, Powell’s eight-minute address wiped over $2 trillion from global stocks, including $1.25 trillion in the U.S. alone. #Fed's Powell has destroyed ~$2tn in global stock market cap with his 8-minute “Until the Job Is Done” Jackson Hole speech, makes $4.2bn loss per second. pic.twitter.com/05YE5yG693 — Holger Zschaepitz (@Schuldensuehner) August 28, 2022 “At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases,” Powell said. Once again the peak in inflation has called the bottom is stocks for now. Let’s watch to see if this continues to play out. pic.twitter.com/HE2KfrjMVL — Game of Trades (@GameofTrades_) August 28, 2022 Flagging cumulative data for the S&P, Game of Trades continued to argue that all was in fact not as bad as it seemed. “SP500 is showing A LOT of underlying strength,” accompanying comments from the weekend read. Moment of truth coming up for the entire #crypto market. Facing another test of the 200-Week MA, which ultimately could lead to a HL and retest. Sentiment is on an ultimate low.$DXY needs to reverse or top out soon, though. pic.twitter.com/qlvutKi9QG — Michaël van de Poppe (@CryptoMichNL) August 29, 2022 The dollar’s surge likewise spelled pain for major fiat currencies, notably the euro, which swiftly headed back below parity with the greenback into Aug. 29. The European Central Bank, along with the Bank of Japan, has been reluctant to instigate the same bill of rate hikes as the Fed, leading to inflation continuing to climb over the summer. EUR/USD 1-hour candle chart. Source: TradingView MVRV-Z score retreats into the green Heading back into its “buy” zone is a classic Bitcoin strength indicator which has caught macro bottoms throughout Bitcoin’s lifespan. The MVRV-Z score indicator, which began to prepare analysts for a price bottom in July, is now falling again, hitting its lowest in a month. Bitcoin MVRV-Z score chart. Source: LookIntoBitcoin MVRV-Z uses market cap and realized price to determine how close BTC/USD is to its “fair value.” In July, it printed a potential BTC price floor of $15,600, while briefly exiting its buy zone before returning during the second half of August. As Cointelegraph reported, realized price — the average at which the BTC supply last moved — now sits at around $21,600, data from on-chain analytics firm Glassnode confirms. Bitcoin realized price chart. Source: Glassnode “Extreme fear” makes a comeback Perhaps unsurprisingly, Bitcoin heading back below $20,000 has caused its key market sentiment gauge to return to its most bearish category. As of Aug. 29, the Crypto Fear & Greed Index is back in “extreme fear” territory at 24/100. Having reached as high as 47/100 during the relief rally, the Index now resides in the bracket which has characterized several months of 2022. This year even saw its longest-ever spell in “extreme fear,” along with lows of just 6/100 as an overall market sentiment score. Crypto Fear & Greed Index (screenshot). Source: Alternative.me Analyzing the mood across investors, however, on-chain research firm Santiment noted that large-volume investors were adding to their holdings rather than divesting. “As Bitcoin has danced around $20,000 this weekend, a positive sign is the growth in the amount of key whale addresses,” it commented on a chart for August. “There’s a correlation between $BTC’s price & the amount of addresses holding 100 to 10k $BTC, and they’re up 103 in the past 30 days.” Nonetheless, others felt that there was still some way to go before a genuine macro turning point was reached in crypto demand. “The true generational entry is not just when people are afraid to buy, but when they’re too broke to buy,” on-chain analytics firm Material Indicators acknowledged. “Not there yet.” Bitcoin whale address growth annotated chart. Source: Santiment/ Twitter The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. 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