Market Analysis by Florian Grummes covering: US Dollar Index Futures, BTC/USD, XAU/BTC, Bitcoin. Read Florian Grummes's Market Analysis on Investing.com
has experienced significant market fluctuations over the last few weeks. While Bitcoin spent most of the spring with a boring sideways consolidation, volatility has exploded in recent weeks. Hence, the exuberant ETF euphoria is gone and pessimism is spreading among investors.Since the new all-time high of $73,793 on March 14th, Bitcoin initially only digested its enormous price gains slowly and sluggishly through a sideways consolidation until mid-June.
Overall, it is still too early to call for the end of the correction in the stock markets. Accordingly, caution is still advisable when it comes to Bitcoin.Bitcoin Weekly Chart – Buyers Are Waiting Below USD 55,000:Since the new all-time high of USD 73,794 USD on March 14, Bitcoin has been in an extended consolidation for almost five months. With a pullback of almost 33%, one can now also speak of a correction.
On the daily chart, Bitcoin has slipped significantly below its 200-day line during the sell-off and has not yet been able to regain it despite the rapid recovery. For the first time since the end of 2022, the “Crypto Fear & Greed Index” shows a sharp increase in panic among market participants with a low of 29 out of 100 points.So far, it has only been a brief panic. In the past, however, such uncertainty usually needed to lasted longer than just a few days. The sharp price drop within just a week is likely to have thrown highly leveraged market participants out of the market.
Accordingly, the Bitcoin/Gold ratio has fallen very significantly within around five months from values of around 34.5 down to around 21.4. In addition to the classic 61.8% retracement at around 18.8, the uptrend line that started in January 2023 is waiting at around 19 as the ultimate support. At the very latest, the Bitcoin/Gold ratio should be able to turn upward again in this area.
However, the sharp spike in the VIX on Monday afternoon already indicated a short-term, completely exaggerated panic. Not surprisingly, the situation calmed down quite quickly in the following days. The markets also stabilized thanks to the Bank of Japan’s announcement that it would not raise interest rates any further for the time being.Frequency of 10% and 20% pullbacks, as of August 7th, 2024.
The intense U.S. election campaign is unlikely to calm tempers but rather has the potential to increase uncertainty and tension until at least early November.
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