On Monday, Bitcoin (BTC) saw a decline as a low-liquidity market wiped out the weekend’s increase above the $80,000 mark.
Essential Highlights:
- Bitcoin dropped 2% below the $80,000 level after achieving its highest weekly closing price since early May.
- Market participants are taking a cautious approach ahead of significant US inflation data expected this week.
- Recent assessments highlight Bitcoin’s impressive “resilience,” as it has maintained a narrow trading range since mid-August.
Bitcoin Awaits US Inflation Data: Expert Insights
According to TradingView, BTC/USD experienced nearly a 2% drop during the day. This change in value follows its first weekly close above $80,000 since May.
BTC/USD hourly chart. Source: Cointelegraph/TradingView
With US markets closed for the Labor Day observance, the reduced trading volume heightened the likelihood of rapid price shifts to capture liquidity both above and below the current market price. Data from CoinGlass indicated that liquidations were roughly balanced between long and short positions in the past 24 hours, with a total of $178 million across the crypto market.
Crypto liquidation data (screenshot). Source: CoinGlass
As Monday progressed, liquidity improved, with key levels identified at $80,500 and $78,800 serving as short-term targets.
Crypto liquidation heatmap. Source: CoinGlass
Commentary from trading firm QCP Capital pointed out a decrease in overall volatility, suggesting that traders are awaiting external factors. These factors are expected to come from US inflation data set to release on Thursday and Friday, potentially influencing market expectations regarding the Federal Reserve’s interest rate changes.
“The current reduction in volatility, even with upcoming triggers, suggests a market in search of clarity rather than making strong directional bets,” stated QCP in its latest report. It further remarked that the “market appears poised for a significant break once the inflation statistics are released.”
BTC’s Notable “Resilience” Gains Attention
Despite trading within a limited range since August 21, BTC/USD displayed bullish signs and retained most of its 25% gains from earlier in the month.
Related: Here’s a recap of today’s events in crypto
BTC/USD daily chart. Source: Cointelegraph/TradingView
In discussions with Cointelegraph, Ryan Lee, Bitget’s chief analyst, pointed out that Bitcoin has absorbed last week’s macroeconomic volatility trigger, specifically a surprising increase in nonfarm payroll figures.
“The resilience of Bitcoin is noteworthy, as improved employment numbers typically exert upward pressure on yields and the dollar, creating a challenging environment for risk assets,” he explained.
“The market’s capability to handle this adjustment indicates that investors are considering other factors beyond just a possible Fed rate hike influencing Bitcoin’s current levels.”
As noted by Cointelegraph, the US spot Bitcoin exchange-traded funds (ETFs) are also in focus following a remarkable $730 million in net inflows on Thursday, marking the highest single-day figure since January.
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