Following a recent decline, a counter-rally was observed; however, the overall market sentiment remains bearish this week. The latest recovery has prompted questions about whether the downtrend is over. We aim to analyze stock market data to comprehend investor behavior and derive conclusions. Let’s delve into it.
Is the Bitcoin Decline Over?
We descended to the lowest levels of the past two weeks, and the recovery in the U.S. session was overshadowed by Asian market sales, making the week challenging for bulls. We explored the macroeconomic negativity in detail. Now, let’s turn our attention to crypto-specific data. Velo data confirms how BTC performance varies according to trading sessions.
In a three-day view, Hyblock data shows the appetite of buyers looking to purchase at low levels. The critical point here is the painful $107,000 mark.
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Downside risks have not disappeared. While the segment representing institutional investors with $1,000 to $10 million continues to sell, retail investors with 100-1000 units keep counterbalancing with spot purchases. Notably, sales in the ETF channel suggest that big investors are more attracted by the fundamental risk-aversion narrative.
Even though the price dropped below $110,000, buyer interest has grown in the order book. The metric measures the relationship between buy and sell orders, ranging from +1 to -1, confirming a bullish appearance due to a positive Hyblock outcome.
The emergence of buyers is notable when the price deeply fell from $111,200 to $110,553. Yellow arrows in the four-hour cumulative volume delta confirm an increase in buyer volume.
The scenario, highlighting a price rebound from $107,500 to $118,000 during September 5-7, appears reminiscent of previous movements. Whether history will repeat itself remains to be seen.
Is the Cryptocurrency Downturn Here to Stay?
Metrics and data indicate that buyers have not given up. The latest decline after testing lows confirms this, but a challenge remains. Significant sales in altcoins are triggering substantial decreases. Investors are concerned about upcoming economic reports.
There is a noticeable concern about a scenario where surprise data could stoke fears further on the macro front. Already, the narrative that “the Fed paused rate cuts again” has cast a shadow over cryptocurrencies. Lisa Cook recently appealed to the high court in response to Trump’s efforts to remove herself from office, casting doubt over successfully convincing board members of rate cuts.
In a few hours, upcoming ETF data will reveal how much fear may continue to increase. Let’s hope for lower PCE, much lower employment figures, and rallies reminiscent of 2021 next month.
