Bitcoin (BTC) - September's Crucial Test!

The market has had ample time to process the recent significant drop, which, to date, is the most severe crypto market decline since the most recent lows, even exceeding the impact of the FTX collapse in November 2022.

Given this context, it's important to consider what might serve as the next major catalyst for market direction. Recently, the crypto market has shown responsiveness to US jobs data, with key dates triggering substantial movements. If this trend continues, September 6th will be a pivotal date.

If the payroll numbers on September 6 align with expectations, which I anticipate, the market should maintain its upward momentum and resume growth with minimal concern about a severe recession.

On the other hand, if the payroll figures fall short, the market may enter a bear phase, potentially declining for 2-6 months. While this scenario is less favorable, it's a plausible outcome, as there are no certainties in the market.

Let’s explore both potential scenarios in detail, considering extreme possibilities and outlining some of the most logical strategies for this week. In the last article, we focused on the likelihood of a low point, and it certainly appears to be in play. However, we are prepared for both outcomes and potential market setbacks if our analysis proves incorrect.

Bullish Scenario:

• Magnitude of Decline: The current drop has surpassed the severity of the FTX collapse. Given this, it's reasonable to anticipate some upward movement from here.
• Bitcoin Price Target: Bitcoin could potentially reach $53.5K, which would validate August’s wick while still maintaining a bullish outlook.

• Monthly Trends: The monthly chart remains unaffected by the current price action. It’s premature to declare a bear market if the macro trends remain positive.

• Weekly Structure: The weekly chart continues to show characteristics of a bull market. Unless Bitcoin trades below $54K for two consecutive weeks, the bullish trend remains intact. (Refer to MA Chart for detailed analysis.)

Bearish Scenario:

• Current Pessimism: While there aren't many immediate bearish signals, a shift towards a more pessimistic outlook could emerge over the next few weeks, particularly in September. This shift might be triggered by weakening macroeconomic indicators, which could lead to a significant decline in market sentiment and undermine overall confidence in crypto assets.
• Historical Context: The first three months of the current consolidation phase were predominantly bearish, likely due to the price’s proximity to previous all-time highs (ATH). As profit-taking occurred, the market dynamics shifted in the latter part of this phase, flipping towards a more bullish stance.

Bearish Targets:

• Initial Support: If Bitcoin confirms trading below $54K, the price may test $42K as an initial point of interest, where we should expect some market reaction.
• Extended Downtrend: Should the market enter a 6-month downtrend, a consolidation phase could push Bitcoin towards $30-33K, which would present an ideal entry point.

Trigger Point: The bearish case will only be triggered if Bitcoin falls below $54K.

After a major market drop and with no clear trend established, Bitcoin’s direction hinges on the upcoming US jobs report and the Fed's likely easing cycle starting on September 18. Expect increased volatility this month.

I remain cautiously bullish as long as Bitcoin holds above $54K.