The U.S. Consumer Price Index (CPI) in August was basically in line with expectations, and traders reduced their bets on the Federal Reserve to cut interest rates by 50 basis points next week. According to the FedWatch tool of the Chicago Mercantile Exchange, the probability of the Federal Reserve cutting interest rates by 50 basis points next week has dropped from 44% last week to 13% now.
After falling sharply in the morning, the major U.S. stock indices reversed trend in the afternoon. At the close, the S&P, Dow Jones and Nasdaq all rose, up 1.07%, 0.31% and 2.17% respectively.
Bitpush data shows that after the CPI was released, Bitcoin fell to an intraday low of $55,535. Bulls then stepped in and pushed it back above $57,000. As of press time, Bitcoin is trading at $57,342, up 0.54% on the day.
In the Altcoin market, 85% of the top 200 tokens are in the red. Injective (INJ) performed best, up 3%, followed by Monero (XMR) up 2.8%, and Uniswap (UNI) up 2.2%. RocketPool (RPL) fell the most, down 9.5%, Ethena (ENA) fell 7.8%, and Dymension (DYM) fell 7.3%.
The current overall market value of cryptocurrencies is $2.02 trillion, and Bitcoin’s market share is 56.3%.
BTC rebounds with difficulty, trend decoupled from gold
In the past few months, spot gold has performed well, while BTC has lagged behind, suggesting that investors regard gold as a preferred safe-haven asset amid an uncertain macro environment. According to Kaiko , a crypto analytics provider, Bitcoin's 30-day volatility has soared to 70%, almost double last year's level and close to Bitcoin's peak in March when it hit an all-time high.
The correlation between Bitcoin and gold turned negative, with gold hitting new highs above $2,500 an ounce while BTC is down more than 22% from its high above $73,000 set in March.
While gold is in favor among investors, U.S. stocks have struggled, with the S&P 500 down 3.6% since August 30.
CryptoQuant analysts wrote: “In terms of valuation indicators, the Bitcoin price is still in a bear market phase. The CryptoQuant Bull-Bear Market Cycle Indicator has been in a bear market phase since August 27 when the Bitcoin price was $62,000. As long as the indicator remains in a bear market phase, no significant rebound is expected.”
The analyst noted that the MVRV (market value to realized value) ratio — a metric that helps identify periods when Bitcoin is significantly overvalued or undervalued relative to its “fair value” — “has been below its 365-day moving average since August 26.”
“A break below the 365-day moving average also signals the risk of a deeper price correction. This also occurred in May 2021, when Bitcoin fell 36% in two months, and in November 2021, the start of the previous bear market,” they warned.
They added: “Low spending margins for long term Bitcoin holders (LTH) also show bearish signs. The LTH SOPR bands (moving averages of varying lengths) have been trending down since late July. The fact that LTH’s spending margins are low suggests a lack of new demand for Bitcoin.”
Julio Moreno also highlighted Bitcoin’s behavior as a risk-on asset similar to stocks, stating that “Bitcoin behaves more like the Nasdaq than gold.”
But some analysts believe that market conditions may soon start to improve. Analyst Bitcoin Trapper said on the X platform that Bitcoin's 3-month chart is similar to the 3-month chart of gold in 1976, when gold rebounded from a collapse to a market value of $17 trillion.
According to Charting Guy, the Bitcoin/Gold fractal has correctly predicted Bitcoin’s price action over the past 1,000 days, suggesting that BTC should begin trending higher after October.
And crypto trader Roman said he is waiting for a retest of $55,000, saying: "BTC H4 plan remains unchanged. Waiting for the 55k area for a potential long setup, as we know that the last surge after the recent plunge was a Dead Cat Bounce. Never long on the first rebound after a drop, it usually retraces."
Twitter: https://twitter.com/BitpushNewsCN
BitPush TG Exchange Group: https://t.me/BitPushCommunity
Bitpush TG subscription: https://t.me/bitpush
Btok subscription: https://btok360.com/bitpush
