Key Points
- Bitcoin’s market sentiment shifts from neutral to fear due to uncertainty around the Federal Reserve’s interest rate decision.
- Bitcoin’s activity decreases, but this could be a precursor to a significant market event.
Bitcoin experienced a positive surge last week, which significantly uplifted investor sentiment. However, the start of this week has seen a downturn as the market heads into a crucial week.
The rally last week resulted in Bitcoin’s market sentiment transitioning from fear to neutral. Yet, by the 15th of September, it had reverted back to fear. This is likely due to the increasing uncertainty surrounding the Federal Reserve’s upcoming decision on interest rates.
Bitcoin’s Price Fluctuations
The changes in Bitcoin’s fear and greed sentiment corresponded with notable price action observations. Last week’s rally briefly pushed Bitcoin above $60,000. This achievement, however, was fleeting, leading to the creation of more lower highs, a pattern that has been typical of Bitcoin’s price action in recent months.
Despite these fluctuations, Bitcoin maintained a relatively stable price level at $58,875. However, the weekend’s pullback underscored a critical aspect of the cryptocurrency: it is now at a point where lower highs indicate a weakening bullish stance.
If this negative sentiment continues to impact Bitcoin, there is a possibility that its price may drop below $50,000. Conversely, the Federal Reserve’s impending announcement regarding interest rates could be a bullish event. If aggressive rate cuts are announced and the market reacts positively, this could trigger substantial demand, potentially pushing Bitcoin back into the $70,000 price range or even higher.
Lower Bitcoin Activity
Recent Bitcoin metrics show an increasing adoption of a cautious approach. This is reflected in the significant decrease in the number of large transactions over the past three days. On 13 September, approximately 17,580 large addresses were recorded, but by 15 September, this number had dropped to 12,520.
This trend mirrors the decrease in exchange activity during the same period. Since 13 September, exchange flows have dropped considerably. As of 16 September, inflows remained slightly higher at 5,577 BTC, with outflows at 3544 BTC.
These Bitcoin exchange flows highlight the anticipation surrounding the Federal Reserve’s announcement. Additionally, political influences have been a significant factor in Bitcoin’s price volatility. For example, recent reports suggest that there may have been another attempt on Donald Trump’s life, but he emerged unharmed.
These political influences could significantly impact Bitcoin over the next two months. This suggests that Bitcoin is entering a critical phase where it is likely to break out of its current narrow range.
