Bitcoin Price Forecast: $58K Support Holds, Next Week Potential Upside Rally
Bitcoin’s price has been experiencing a flat-to-downward trend throughout August, with the cryptocurrency down by 12% for the month so far. Despite this decline, there is optimism for a potential upside rally in the coming week as volatility may return alongside a fresh batch of U.S. economic data.
Market Trends
Over the past couple of weeks, there has been a noticeable pattern in Bitcoin’s price action where prices tend to rise during Asia trading hours and fall during U.S. hours. This trend has continued, with Bitcoin currently trading at $58,200, down by almost 4.4% over the past 24 hours. Despite the drop, Bitcoin has outperformed the broader market gauge CoinDesk 20 Index, which has seen a 5.6% decline. Other cryptocurrencies such as Ether (ETH), Chainlink (LINK), and Cardano (ADA) have experienced larger declines compared to Bitcoin. Solana (SOL) has had the worst session, with a 9% decline.
Looking at the overall performance for the month, Bitcoin has fallen by over 12% in August, reversing the gains seen in July. Ether is also down by 25% for the month, narrowing its year-to-date gain to just 7%. Similarly, Solana has experienced a 25% decline in August but still maintains a 31% year-to-date advance.
Buy Asia, Sell the U.S.
The familiar pattern of “Asia bids, America dumps” continues to influence Bitcoin’s price action. According to market analyst Miles Deutscher, Bitcoin has seen positive returns during Asia trading hours over the past two weeks, while U.S. hours have resulted in negative returns. This trend has persisted, with Bitcoin once again selling off during U.S. morning hours.
Change in Trend Ahead?
Despite positive catalysts such as growing institutional adoption and potential regulatory developments, the Bitcoin price has struggled to maintain its upward momentum. Since reaching an all-time high near $73,500 over five months ago, Bitcoin has declined by more than 20%. The lackluster performance has left bulls wondering if there is anything that can shift the current downward trend.
However, there is hope for a change in sentiment next week as the U.S. returns from the Labor Day holiday. The release of new economic reports, particularly the Nonfarm Payrolls Report for August on Friday, September 6, could potentially alter the macroeconomic landscape. A weak jobs report for July prompted the Federal Reserve to promise a rate cut in September. Market expectations currently anticipate a modest 25 basis point cut, but a second consecutive weak jobs report could lead to a more substantial rate cut by the central bank.
On the flip side, a strong jobs report in September could temper expectations for further monetary policy easing, impacting risk markets including Bitcoin. Regardless of the outcome, increased volatility is expected, with a 50% chance of an upside move. Bulls in the market would welcome this potential shift in momentum.
Conclusion
In conclusion, Bitcoin’s price forecast remains uncertain as it continues to face downward pressure in August. However, there is optimism for a potential upside rally in the coming week, driven by new economic data and market dynamics. Investors should stay informed and monitor key indicators to navigate the cryptocurrency market effectively. As Bitcoin remains a volatile asset, it is essential to exercise caution and consider the risks associated with trading digital currencies.