What you need to know about Bitcoin this week

"The bubble on the bond market has burst," and five things you need to know about Bitcoin this week

The price of BTC opens up a time tunnel to November 2020 as the U.S. dollar destroys both currencies and stocks.

After ending last week at its lowest level in almost two years, Bitcoin (BTC) starts the new week in a wild macro environment.

As risky assets around the world take a beating and the US dollar goes up, the largest cryptocurrency isn't doing very well.

September started out on the bulls' side, but now it's living up to its informal crypto market nickname, "Septembear," with BTC/USD down 6.2% since the beginning of the month.

The bad news keeps coming for hodlers, who are holding on to more and more dormant coins as the dollar continues to rise and fewer and fewer people want to diversify into riskier plays.

This week, everyone will be paying attention to macro, so Cointelegraph looks at what might happen to the price of BTC.

Here are some things to think about when trying to figure out where Bitcoin could go next in an economy that is as unstable as any major time period in the past century or more.

BTC/USD goes back to November 2020 when the week ends.

Even though Bitcoin didn't lose as much as it did last week (3.1% vs. 11.1%), it still had its lowest weekly close since November 2020, according to data from Cointelegraph Markets Pro and TradingView.

As the losses keep coming, Bitcoin has turned back the clock to before the breakout, which took it past its all-time high from the previous halving cycle.

The average hodler doesn't like the feeling of déjà vu because most of the food they bought and put in cold storage over the past two years is now worth less than they paid for it.

After the close, SB Investments, a well-known Twitter analyst, said after the close, "BTC just had the lowest weekly close in this zone."

"It looks bad for stocks, which are also trying to break support. But on the other hand, everyone expects this. "
A key alternative argument for Bitcoiners is whether or not the market could pull off a surprise "max pain" move to the upside, which would get rid of short bias. Omz, a well-known trader, thinks that the weekly close price of $18,800 is a good indicator of a local bottom.

The RSI divergence has been noticed by other people. Last week, trader JACKIS called attention to it.

"In the past, we only got two touches of oversold territory, and they always marked the exact bottom," he tweeted at the time.

Account of a fellow trader IncomeSharks also said that the U.S. midterm elections in early November could cause a change, but they didn't say that the bottom was in.

It said on the day's 4-hour chart, "Elevator down, stairs up":

"Keep making double bottoms and new supports, because the Midterm Rally is still possible. "Break this structure, get rid of these targets, and find a new bottom."

The dollar's crash costs stocks and fiat money.

Even though it's only Monday, the chaos that happened last week is already back in full force on macro markets.

Key trading partner currencies are being destroyed by an unstoppable U.S. dollar. The Great British pound sterling is making headlines today as it falls by 5% to get within a few percentage points of USD parity, which would be its lowest level ever against the greenback.

GBP/USD would follow the euro becoming worth less than $1.00, and Japan's government had to artificially prop up the yen exchange rate last week because of how bad things were getting.

EUR/USD briefly fell below $0.96 before making a small comeback, while USD/JPY is still close to its highest level since the 1990s, even though Japan stepped in.

At the same time, alarm bells are going off for global bonds, which are back to where they were in 2020. Markets commentator Holger Zschaepitz warned alongside Bloomberg data:

"It looks like the bubble in the bond market has burst. This week, the value of bonds around the world fell by another $1.2tn, bringing the total loss since ATH to $12.2tn. Futures for the day before Wall Street opens show that stocks won't do any better. The price of a barrel of Brent crude oil fell below $85 for the first time since the beginning of 2022.

"Global bonds are collapsing in their fiat currencies, which are collapsing against the dollar, which is quickly losing purchasing power," said Saifedean Ammous, author of the popular books "The Bitcoin Standard" and "The Fiat Standard."

"The average person who uses fiat money won't realise how badly off they are financially for months or even years. Poverty is the "new norm." Cryptocurrencies still have a strong relationship with stocks and a negative relationship with the strength of the dollar. Since the status quo is likely to stay the same, the outlook for Bitcoin is not very good.

This week, the Euro Area Consumer Price Index (CPI) should show that inflation is still going up, while the U.S. Personal Consumption Expenditures Price Index (PCE) should continue the U.S. downward trend that started in July.

The U.S. dollar index (DXY), on the other hand, is at its highest level since May 2002 and shows no signs of going down.

The way hodlers act in a classic bear market

In the middle of all this chaos, it's not surprising that Bitcoin holders' faith is growing and long-term investors are refusing to sell.

In Bitcoin bear markets, people tend to hold on to their coins for a long time, and the most recent data shows that this mindset is back in full force this year.

Onchain analytics firm Glassnode says that Bitcoin's "Coin Days Destroyed" (CDD) metric is reaching new lows.

CDD is the number of dormant days that are lost when BTC leaves its host wallet after a certain amount of time. When CDD is high, it means that more coins that have been stored for a long time are now moving.

"The number of Bitcoin coin-days that have been destroyed in the last 90 days has reached an all-time low," said Glassnode.

"This means that coins that have been HODLed for a long time, like months or years, are as quiet as they've ever been."

The news comes after weeks of different hodl-focused metrics that showed a commitment to lock up the BTC supply until better times.

Glassnode, on the other hand, pointed out that the number of coins held for at least three months is growing as a percentage of the USD value of the BTC supply.

"Bitcoin HODLers" seem to be firm in their beliefs, the article agreed.

A chart next to it showed Bitcoin's HODL Waves metric, which shows how the supply is split up by how long coins have been inactive.

Whales still decide who gets help and who doesn't.

While experienced traders stay away from the "sell" button, analysts keep an eye on Bitcoin's biggest investors to spot price changes.

Due to how much whale money was used in trading in the past, the current trading range is an area of interest.

Large buys give a certain support price more weight, and the same is true for resistance levels. BTC/USD is currently stuck between these two levels, according to the on-chain monitoring tool Whalemap.

"Holding between 19k and 18k is important for $BTC," the Whalemap team said at the end of last week.

A chart that went with the article showed that whale resistance levels capped Bitcoin's relief and kept it within the $20,000 zone.

The second week of "Extreme Fear"

The crypto market has been in a state of "extreme fear" for more than a week. This is a return to the norms of 2022.

The Crypto Fear & Greed Index, which measures how people feel about the crypto market as a whole, shows that the average investor couldn't feel worse about the future.

Fear & Greed had a score of 21/100 as of September 26. A score of 25/100 is the limit for extreme fear.

This year, the market spent more than two months in "extreme fear," which was its longest time ever in that state.

Santiment noted that interest in social media went up over the weekend, which could be a bright spot.

"Among crypto's top 100 assets, $BTC is being talked about in more than 26% of conversations for the first time since mid-July," it was said this week on Twitter:

"Our backtesting shows that having 20% or more people working on Bitcoin is good for the sector."