Dovish Fed Minutes Boost Bitcoin Bullish Sentiment

On August 22, open interest (OI) in bitcoin futures jumped from $30.21 billion to $31.92 billion, according to Coinglass. The trigger was the release of the minutes from the latest Fed meeting, which contained signals of a rate cut in September.

According to the data aggregator, longs account for 50.88% of OI in monetary terms, while shorts make up 49.12%.

Data from The Block shows the put-call ratio (0.51) also indicates prevailing optimism.

10x Research noted that after the minutes’ release, a rate cut in September is beyond doubt.

“The overwhelming majority of Committee members supported easing policy in September, with some even considering action in July,” the report states.

Analysts highlighted the upcoming Friday speech by Fed Chair Jerome Powell at the banking forum in Jackson Hole, Wyoming. They believe the speech will contain dovish signals, leading to a rise in risk assets, including bitcoin.

Increased Volatility

The historical volatility of the leading cryptocurrency is approaching levels seen in March after the update to ATH. This was noted by trader Daan Crypto Trades.

#Bitcoin After a big slump in volatility levels, it’s now ramping back up and getting close to levels we saw earlier this year at the all time highs.

It’s what’s eventually needed to put an end to this massive consolidation in one way or another pic.twitter.com/CHoZXHk5K4

— Daan Crypto Trades (@DaanCrypto) August 21, 2024

“It’s what’s needed to put an end to this massive consolidation in one way or another,” he added.

According to Coinglass, the 30 DMA of historical volatility jumped to 3.4%. For comparison, on March 27, the metric was 4.28%, and on June 21, it was 1.26%.

Trader TheoTrader warned that the indicator’s dynamics should not be unequivocally interpreted as a bullish signal.

#Bitcoin Seasonality

Based on 10 years price history there is a high chance that September will print cycle lows

Time > Level pic.twitter.com/Klz4QG5APn

— TheoTrader ? (@theo_crypto99) August 21, 2024

“Based on 10 years of price history, there is a high probability that September will see cycle lows,” he suggested.

Expert Opinions

Analysts at Fairlead Strategies warned of correction risks in the fall, pointing to overbought signals in several popular technical indicators on the 30-day chart.

“A downtrend has formed on the monthly stochastic. If confirmed at the end of the month, it will be a negative catalyst. […] It could signal the end of the cyclical uptrend from the 2022 low,” the review states.

Analyst and CMCC Crest co-founder Willy Woo noted that the bitcoin market has shed significant leverage in derivatives, which, along with an influx of about 100,000 BTC from the German government and Mt.Gox clients, led to a crash in early August.

I’ve been on RnR for a while, but…

Here’s the chart I like best to set the scene.

Less inventory = bullish

Until the start of Aug, we’ve been in a bearish stance with an influx of 100k coins (Germany, MtGox, DOJ) while speculation has been rife creating more paper BTC. pic.twitter.com/Yq7yhMpRZ8

— Willy Woo (@woonomic) August 21, 2024

“We are already 66% of the way there, as most speculation has left, and more spot coins remain to be absorbed. […] In the short term, my bearish stance has shifted to delicately neutral. […] In the long term, the good news is that we are not in a bear market. Just a very long consolidation,” the expert commented.

Technical analyst and Factor LLC head Peter Brandt noted that the current bull market cycle will soon become the longest post-halving period in history without a new ATH. He added that within this framework, reaching a new all-time high is not guaranteed.

An FYI on $BTC
Current bull market cycle in $BTC will soon become the longest time post halving in history for a new ATH
or,
Could indicate that new ATH is not in the cards pic.twitter.com/jkeboVAGtp

— Peter Brandt (@PeterLBrandt) August 21, 2024

Trader and analyst Rekt Capital determined that to confirm the start of a new uptrend, the price of the leading cryptocurrency must hold above the resistance at $61,420.

#BTC

Once Bitcoin has solidified itself at the Channel Bottom…

The uptrend across the Channel to the very top of it would likely take 2-3 weeks

Convincingly break ~$61420 soon and this week will technically count as week 1 in that new uptrend$BTC #Crypto #Bitcoin https://t.co/0Oj3OcJBf4 pic.twitter.com/5wnFbgN5cQ

— Rekt Capital (@rektcapital) August 21, 2024

Earlier, VanEck’s head of digital asset research, Matthew Sigel, predicted bitcoin’s rise to ATH post-US elections due to liquidity inflows.

Previously, former BitMEX CEO Arthur Hayes stated he expects the first cryptocurrency’s price to rise to $100,000 by year-end due to improved liquidity conditions. Before this, he downplayed the importance of election outcomes for the prospects of digital gold.