Yesterday, the crypto market experienced a sizable pullback. Just like Bitcoin, gold was dropped, which has been because of the stronger buck.
After failing to break above the $12,000 level, bitcoin has started to lose momentum. But according to Edward Moya of Oanda, if the greenback softens, it could be the catalyst to help the digital asset breach that threshold again.
The US dollar has been bouncing off its lows that pushed commodities down but not the stock markets, which are making new all-time highs. The USD Index went above 93 today after falling to 91.75 on Tuesday.
Stock markets have been on a tear lately, but with September not historically being a great month for them, it’s to be seen if things will change.
While the stock market is enjoying a bull season, a new cycle for bitcoin will start when BTC moves back $12,100, but analyst Bob Loukas doubts that “we get that until to late Sept, after the Cycle Low.”
I've been cautioning members of #bitcoin live since mid Aug about an upcoming Sept Cycle Low in BTC.
Ideally a good flush below $10k is more bullish. Will serve as a good clean up. A dip is an opportunity, pic.twitter.com/hAsX28UNdL
— Bob Loukas (@BobLoukas) September 3, 2020
A Resting Bull Market
Bitcoin is still trading in the range of $11,000 and $12,000, and “usually, when we get a range like this, the idea is to buy the bottom and sell the top. So when it gets higher up, we close a few positions, and near the bottom, we add some. That is unless we see a breakout, in which case all bets are off,” wrote Mati Greenspan in his daily newsletter Quantum Economics.
In the meantime, investors remain bullish with Michael Novogratz of Galaxy Investment, saying “cryptocurrency is here for good.”
“We’ve crossed the Rubicon — Bitcoin is not going away, the Ethereum project is not going away, it’s got critical mass, and you are going to continue to see innovation after innovation,” said Novogratz.
Risking Zero to $500,000: #Bitcoin Set to Stay Upward Trajectory —
Bitcoin appears as a resting bull market on the back of gold, in our view. Reversion risks are high for lofty #equities and #Ethereum, but like #gold, Bitcoin should come out ahead in most scenarios. pic.twitter.com/N73HjwxXpd
— Mike McGlone (@mikemcglone11) September 3, 2020
Corrections Still to Come
Bitcoin network demand also remains a strong bull this week, with network fees continuing to expand on both short and longer time frames. “Short term transaction value remains stable, and velocity is around 640%,” as per data source ByteTree.
But does it mean a deeper pullback is out of the picture? Not really; if the macro market sees a correction, bitcoin will follow. Miners are also looking to sell their BTC.
Miners are moving unusually large amounts of #BTC since yesterday. #Poolin, #Slush, #HaoBTC have taken the bitcoins out of the mining wallets and sent some to the exchange.https://t.co/NcLmXvZmOD pic.twitter.com/N3E3mX4QKn
— CryptoQuant (@cryptoquant_com) September 3, 2020
Moreover, during the last bull cycle, the price saw several 30% to 40% pullbacks, which haven’t happened this time.
“I expect a 30-40% pullback at some point in this rally. Could be from $14k or it could be from here. Over allocating seems risky till that's out of the way,” said analyst DonAlt.