Cryptocurrency markets, led by Bitcoin, are experiencing volatility amid mixed technical indicators and noticeable weakness in overall momentum, raising serious questions about the sustainability of any potential upward rebound.
According to the latest weekly report from Matrixport, Bitcoin's performance is suffering from a decline in momentum, supported by a decrease in trading volume and a continued drop in funding rates, indicators suggesting a structural decline in market dynamics. Technically, the $112,000 level is viewed as a key support barrier, and breaking it could push prices towards the $106,000 area. Although some technical indicators show that the market has reached a 'sell saturation' stage, enhancing the likelihood of a temporary rebound, analysts' outlook remains cautious and leans towards a scenario of sideways consolidation.
Behind this apparent weakness lies a set of major economic factors. The US manufacturing index (ISM) has continued to decline for the third consecutive month, with weak expansion in the non-manufacturing sector. The situation has worsened due to a sharp negative revision in labor market data, which has weakened investor appetite for high-risk assets.
Despite increasing expectations for an interest rate cut by the Federal Reserve in the upcoming September meeting, clear indicators of this remain absent. Additionally, the decline in net assets of public companies holding significant amounts of Bitcoin limits their ability to bolster their holdings through new stock issuance, adding further pressure to the market.
In a separate report from 10x Research, the current state of the market is described as a 'fragile phase' amid limited volatility, absence of overall growth catalysts, and a traditional seasonal stagnation. This has raised doubts about the sustainability of the recent gains in both BTC and ETH, which seemed driven more by media hype than by fundamental factors.
Despite some positive developments, such as the Trump administration's announcement to open the door for investment in cryptocurrencies within 401(k) retirement accounts, along with increased interest in gold as a hedge asset, the market has not shown strong reactions to this news, reflecting a state of caution and lukewarmness.
Ethereum has recently witnessed significant activity in the number of trading wallets and a rise in prices; however, analysts have suggested that this movement is more related to market narratives than any actual improvement in fundamentals.
Overall, both Matrixport and 10x Research agree that the market stands at a critical crossroads. Prices are approaching technical levels that could represent a key turning point in upcoming trends, whether upward or further correction.
Experts advise investors to monitor technical support developments at $112,000, while continuously following US economic reports and the Federal Reserve's policies. Given the current state of uncertainty, patience and maintaining investment discipline may be a wiser option than betting on sudden movements.
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