Bitcoin Climbs Toward $27,000 After Weak August and Start of September
Bitcoin (BTC) is starting the new week on a positive note as traders are greeted with the first green weekly candle in over a month. BTC/USD is gradually improving in strength, with the price climbing toward $27,000. This solid weekly close sets the stage for what promises to be an interesting few days, including a key United States macroeconomic event that could impact risk assets, including crypto.
US Federal Reserve Meeting Could Drive Volatility in Crypto
The US Federal Reserve is set to meet and decide on interest rate policy, which could have significant repercussions for Bitcoin and other cryptocurrencies. Traders will be closely watching for any surprises that could impact risk assets in the market. While the outlook for Bitcoin looks promising, with network fundamentals expected to surge higher to new records, some traders remain cautious about a potential bearish double top pattern.
FOMC Volatility Expected with Rate Pause Odds at 99%
This week, all eyes are on the Federal Open Market Committee (FOMC) meeting and the decision on interest rates. The market is expecting rates to remain the same, according to CME Group's FedWatch Tool. However, any unexpected decision by the Fed could lead to volatility across risk assets, including Bitcoin. Financial commentators are predicting a volatile week ahead, as the Fed's decision will set the tone for future meetings and the rest of 2023.
Difficulty and Hash Rate Return to New Records
The coming week is expected to see a return to "up only" growth in Bitcoin's fundamental metrics. Mining difficulty, which dipped two weeks ago, is set to cancel out its losses and reach new all-time highs. Similarly, the hash rate, which measures the processing power deployed by miners, continues to set new records. This indicates that the network is becoming more secure against attacks.
Bitcoin Address Numbers Reach Multi-Year Highs
New BTC wallets being created are at their highest since late 2017, during Bitcoin's previous all-time high. The user base is expanding rapidly, indicating growing interest in the cryptocurrency. While the number of active addresses is returning to mid-2021 levels, the overall sentiment among crypto investors remains cautious, with the Crypto Fear & Greed Index still indicating "fear."
Crypto Fear Persists Despite Positive Developments
Despite positive developments in the Bitcoin ecosystem, the average crypto investor is still hesitant. The Crypto Fear & Greed Index shows that sentiment remains in the "fear" category, although it is approaching the "neutral" mark. Price triggers continue to play a significant role in influencing investor sentiment. However, some traders believe that the current environment could lead to a similar price action as seen in previous Bitcoin bull runs.
