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For the week ending Aug. 17, Bitcoin price continued its shaky action, even as low consumer inflation signaled an upcoming dollar supply glut and the S&P 500 Index rallied.
The latest U.S. consumer inflation readout gave the Fed more ammo to justify a big rate cut in September. That’s bullish news for Bitcoin, because more dollars against the same supply of BTC is a recipe for price gains.
Meanwhile, stocks are up again and closing in fast on their July record levels. That might indicate that investors have their feet back under them after the flash crash at the beginning of August. But not so for Bitcoin and other cryptos that remain in correction territory this week.
Solana, XRP, and Polkadot prices were down by double digits this week. Other major cryptos like Ethereum, BNB, Dogecoin, and Cardano were down by 2% to 8% over the week.
So, is the frost of another crypto winter already setting in, or are crypto exchange markets just consolidating ahead of another big bull run to new all time highs?
Here are some Bitcoin price signals that may help crypto traders answer that question.
3 Bearish Bitcoin Price Signals
Bitcoin Price Can’t Break $70K
The Bitcoin blockchain’s hash rate and network activity continue to show strength, but the orange crypto hasn’t made the same gains on exchanges as it has by this time post-halving in previous cycles.
Bitcoin’s price has struggled all year to break key resistance at the $70,000 level despite poking through briefly in March to set an all-time record above $73,000.
Most recently, the exchange rate slumped to below $60,000 as crypto markets shed $80 billion daily.
Exchanges: $1B In USDT Withdrawals
Meanwhile, in another bearish signal for Bitcoin’s price and rates for other cryptos, retail investors have moved massive amounts of stablecoins off crypto exchanges.
Over $1 billion in USDT was withdrawn from exchanges yesterday, marking the largest Tether outflow since May.
While deposits are often viewed as bullish—indicating users are gearing up to buy assets—withdrawals can have a more nuanced interpretation.
For instance, users might… pic.twitter.com/7LQSeNi9kE
— IntoTheBlock (@intotheblock) August 14, 2024
Blockchain insights firm Into The Block reported on Wednesday that users pulled over $1 billion in USDT from exchanges. It was the largest Tether stablecoin outflow from crypto exchanges since May.
The last two times this happened, it preceded Bitcoin price corrections. However, according to Into The Block, it may not necessarily be a bearish signal. Investors “might be moving funds to participate in DeFi, seeking yields outside of centralized exchanges,” the blockchain firm noted.
Bitcoin Price Rejects Low CPI Print
This week’s CPI print showing the lowest 12-month trailing growth in consumer inflation since 2021 might have been a tailwind for Bitcoin price. However, against other factors, there simply wasn’t enough support to keep BTC out of the dumps. That looks very bearish for crypto markets.
Based on supply/demand economics and the nature of central bank policy, the low CPI should have enticed Bitcoin bulls. This community watches and understands central bank policy as well as Wall Street and bond markets. With inflation cooling fast and unemployment jumping to 4.3% in July, the Federal Reserve looks apt to cut interest rates in September.
Now, economists and investors expect the U.S. central bank to slash rates for the first time since beginning to raise rates in Mar. 2022. Morgan Stanley E*Trade’s Chris Larkin said:
“Now the primary question is whether the Fed will cut rates by 25 or 50 basis points next month. If most of the data over the next five weeks points to a slowing economy, the Fed may cut more aggressively.”
Such news might have given Bitcoin a jolt on crypto exchanges if it hadn’t been in such a bearish correction. But at the moment the bears are setting the price.
2 Bullish Bitcoin Price Signals
It’s not all bad news out there this week. Bitcoin price may be a value today based on these two signs:
Bitcoin On Exchanges Hits New Low
Investors are moving their Bitcoin off exchanges.
That’s a bullish stance, and in past markets, it has signaled high conviction and the intention to hold Bitcoin come hail or high water. According to CoinGlass data, the amount of Bitcoin on exchanges recently fell to a historic low.
Over the seven days preceding Thursday, Aug. 15, the BTC balance on crypto exchanges fell by -1,406 on Bitstamp, -1,008 BTC on Coinbase Pro, and -501 BTC on Binance. Total Bitcoin on exchange outflows were -2,847 for all crypto exchanges tracked by CoinGlass.
Bitcoin Technicals
Bitcoin technical signals are also bullish for cryptocurrency in the second half of 2024. The composite global liquidity momentum model (MSI) looks like it did last November. That preceded a historic run-up of the Bitcoin price to record levels by March.
The model comes from Jamie Coutts, chief crypto analyst at RealVision Finance.
“My composite global liquidity momentum model (MSI), has provided the first Bullish regime signal since November 2023,” Coutts wrote Thursday in a post on X. “Recall that Bitcoin rallied 75% from Nov to April before the regime flipped Bearish.”
The central banks are capitulating, the liquidity spigots are opening, and #Bitcoin is about to go much higher.
My composite global liquidity momentum model (MSI), has provided the first Bullish regime signal since November 2023. Recall that Bitcoin rallied 75% from Nov to… pic.twitter.com/ovF6qSHX8c
— Jamie Coutts CMT (@Jamie1Coutts) August 15, 2024
And only time and markets will tell, but the trend lines around the multi-month range-bound sideways channel for Bitcoin are meandering toward forming a (often bullish) falling wedge pattern. Is it a mirage or the start of something big ahead for Bitcoin price?