Bitcoin started a new week in a grim macro environment after posting its lowest weekly close in nearly two years.
Bitcoin is on a tear as risk assets in the global economy take a hit and the U.S. dollar soars.
September has now lived up to its unofficial nickname in the crypto market — “September Bears” — with BTC/USD down 6.2% since the beginning of the month.
For holders, the bad news keeps coming. While the U.S. dollar has surged and mainstream investors’ willingness to diversify into riskier assets continues to fade, more and more people are holding on to dormant bitcoin.
This week, the macro situation will remain the focus of attention, with Cointelegraph providing an analysis of what could happen in BTC price action.
With current economic conditions comparable to any period of major historical turmoil in the past century or so, here are a few factors to consider when assessing where Bitcoin is headed next.
Weekly close puts BTC/USD back in November 2020
Despite not matching the previous week’s losses (3.1% vs. 11%), Bitcoin has recorded its lowest weekly close since November 2020 over the past seven days, according to data from Cointelegraph Markets Pro and TradingView.
As the downtrend continued to unfold, Bitcoin turned back time before breaking out of the all-time high of the last halving cycle.
BTC/USD weekly candle chart (Bitstamp) Source: TradingView
For the average holder, this deja vu is unwelcome — the vast majority of bitcoin bought and cold-stored over the past two years is now shrinking.
“BTC just posted its lowest weekly close in the range,” SB Investments, a popular Twitter analyst, concluded after the close.
“It looks bearish and stocks are looking to break support. But on the other hand, that’s what everyone expects.”
Whether the market is in for a surprise “maximum pain” uptrend is another key argument for Bitcoin holders. For well-known trader Omz, the $18,800 weekly close even represented a convincing bottom.
Trader JACKIS last week pointed to a divergence in the…