The much-celebrated digital currency, Bitcoin, has left traders on tenterhooks as it teeters on the edge of a key support zone. As the cyber coin tiptoes into August, it carries the burden of an unremarkable July, marked by a drop of around 4% and confined to the familiar range of low $29,000s.
As we anticipate a flurry of US economic data later this week, many wonder if this could potentially breathe some life into Bitcoin’s trading conditions. However, Bitcoin has shown an indifferent attitude towards macroeconomic developments in recent months, perhaps being more captivated by significant institutional adoption and the scrutiny of the SEC in the form of regulation.
One of the crucial facets to watch this week will be the evolution of the “soft landing” narrative. This idea suggests that the Fed might control US inflation without causing a recession, which could potentially spur on risk assets if data strengthens it. It’s worth noting that tech stocks have been on the upswing recently, hovering around 6% from the Nasdaq 100 index’s all-time highs. If this rally persists this week, it could work in Bitcoin’s favor.
Historical data highlights August as a traditionally rocky month for Bitcoin, with prices dipping in 7 out of the past 12 years. Yet investors remain mildly positive about Bitcoin’s immediate forecast, according to trends in the Bitcoin options market. The 25% delta skew for Bitcoin options expiring in the coming months are all above zero, which hints at a disproportionately higher demand for bullish call options.
Bitcoin’s near-term course might significantly be influenced by its stand at the pivotal support zone in the mid-$28,000s. If the currency demonstrates resilience here, it could be indicative of an upcoming test of yearly highs. However, if Bitcoin fails to keep up with its strong 2023 uptrend at this junction, it could spiral down to hint at a near-term retest of May’s lows, setting us off on a cautious footing as we navigate the cryptocurrency markets this August.
Source: Cryptonews
