The upcoming trading week for Bitcoin is crucial and will determine the direction of the asset for the foreseeable future.
This week, the technical conditions intertwine with broader macro signals, making it an extremely important week for Bitcoin. Due to Jerome Powell's dovish shift, hinting at possible rate cuts in September, risk assets typically experience significant growth. Although Bitcoin's price action suggests market hesitation rather than strength, macro liquidity still seems to have room for growth, highlighting the potential for a market rally. Without fresh fuel, on-chain data highlights the fundamental issue: liquidity remains stable, but there is no new capital inflow to support a rebound. While the pace of capital outflow has not reached alarming levels, network growth is slowing down, and due to the lack of new buyers or institutional demand, Bitcoin has yet to break through resistance levels. In the absence of capital inflows, even dovish macroeconomic factors are unlikely to drive the next round of Bitcoin price increases.
This indecisive sentiment is reflected in the daily chart. After breaking below the 50-day moving average, Bitcoin is currently testing the 100-day moving average, indicating how weak the recent rebound attempts have been. After breaking through $116,500, several days of bearish candles followed, which is seen as a failed breakout, indicating that upward momentum has essentially vanished. Additionally, the decline in trading volume supports the view that the market still has more downside risks.
Key Points for Bitcoin: As Bitcoin is at a turning point, this week is vital. If Bitcoin can stabilize around the 100-day moving average (EMA) of $111,000-$112,000, especially with an improvement in liquidity conditions, a short-term rebound remains possible. If this support level cannot be maintained, a more severe pullback may occur, further retreating to the 200-day moving average (EMA) near the $104,000 level.
Essentially, what Bitcoin needs to maintain its upward momentum is confidence and new capital inflows, not just macro liquidity. Whether Bitcoin can leverage Powell's dovish remarks to drive a rebound, or whether a lack of participation will further plunge it into a correction range, will be revealed in the coming days.
