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September ‘crash’ to $22K? — 5 things to know in Bitcoin this week

BTC price is looking frail as August comes to an end, and with Bitcoin bulls out of ammo, traders are preparing for more pain to come.
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7 months ago

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BTC price is looking frail as August comes to an end, and with Bitcoin bulls out of ammo, traders are preparing for more pain to come.

Bitcoin (BTC) starts a new week still struggling with $26,000 as August becomes its worst month of 2023.

BTC price strength remains dubious after a snap crash ten days ago, with bulls unable to wrestle back control of the market to provide a relief bounce.

The outlook looks similarly uncertain — September is traditionally a poorly-performing month for Bitcoin, and with the August monthly close just days away, could another downside surprise lie in store?

Macro triggers are once again taking a back seat this week, with Personal Consumption Expenditures (PCE) Index data the highlight in what is otherwise a cool week for crypto contagion.

That said, traders and analysts are on their toes — with no hint of a rebound in sight, many are still braced for worse to come.

Cointelegraph takes a look at the main BTC price performance talking points for the week ahead.

BTC price sags with monthly close in sight

There are no prizes for guessing how Bitcoin ended its latest weekly candle — especially with prior knowledge of previous closes.

Despite holding $26,000 into the close, BTC/USD immediately went downhill thereafter, wicking to $25,880 before consolidating slightly higher, data from Cointelegraph Markets Pro and TradingView shows.

BTC/USD 1-hour chart. Source: TradingView

That marked multi-day lows, part of what popular trader Skew forecast could be pressure from shorters into the new week.

“Shorts continue to stack into the weekend, expecting some kind of move around US Futures open and into Monday EU session,” part of X analysis read.

Skew additionally described weekend BTC behavior as “max pain price action.”

The monthly close was a key topic for market participants, with volatility on the cards after August produced 11% losses.

Keith Alan, co-founder of monitoring resource Material Indicators, predicted a trip to multi-month lows.

“Whales aren’t buying yet, and neither am I,” he commented alongside a chart of the Binance BTC/USD order book.

“Expecting volatility to continue through the monthly candle close. Patiently waiting to test the local low.”

In addition to low whale order volume, the accompanying order book chart showed a lack of bid liquidity overall, with $25,500 gaining only modest interest.

BTC/USD order book data for Binance. Source: Keith Alan/X

“I am looking for a trigger to enter where we drop to $25,000 lows, reclaim and pump,” popular trader Crypto Tony agreed.

“Or if we flip $26,700 into support. No entry before that on #Bitcoin as we are just mid range, so no safe entry just yet.”
BTC/USD annotated chart. Source: Crypto Tony/X

Beyond downside, moving averages which previously acted as support before the crash may now have the opposite effect, popular trader and analyst Rekt Capital warned.

“The BTC bullish momentum moving averages may act as resistance,” he summarized alongside the weekly chart.

BTC/USD annotated chart. Source: Rekt Capital/X

Further analysis hoped for a lower low construction to appear on weekly timeframes in what could be part of a “subtle rising wedge.”

BTC/USD annotated chart. Source: Rekt Capital/X

August risks being worst in eight years

It is no secret that Bitcoin has underperformed this month — even by August standards, which have rarely given bulls anything to celebrate.

BTC/USD is down 11% this month, and with the weekly close around the corner, anticipation is building among market observers.

A look at comparative data from monitoring resource CoinGlass reveals that August 2023 is already vying with last year to become Bitcoin’s worst August since 2015. BTC price shed 13.9% in August 2022, a move which marked just the beginning of half a year of pain.

BTC/USD monthly returns (screenshot). Source: CoinGlass

Looking ahead, however, some believe that September could easily end up almost as bad based on historical precedent.

“Could Bitcoin Crash to $22,000 In September?” Rekt Capital queried last week in part of an X post.

“To answer this question, we need to first focus on August. What was the worst BTC August drawdown in history? -17% in 2014 and -18% in 2015. Currently in 2023, $BTC is now down -16%. If BTC were to drop -18% this August, BTC would drop to ~$24700. But that might not be the end of the retrace.”

Continuing, Rekt Capital noted that September usually offers a “single-digit drawdown.” Against the backdrop of its recent double top on weekly timeframes, a $22,000 target lines up.

“So if BTC retraces, say, an additional -10% in September... That would mean price would drop to ~$22200,” he concluded.

“Then that would approximately match the Measured Move target for the Double Top breakdown of ~$22000.”
BTC/USD annotated chart. Source: Rekt Capital/X

Bitcoin's "longest bear market in history"

Analyzing year-on-year (YoY) percentage returns for BTC/USD, meanwhile, the true extent of the recent bear market becomes clear.

Michaël van de Poppe, founder and CEO of trading firm Eight, concluded that it has in fact been Bitcoin’s “longest bear market in history.”

“The current bear market is relatively comparable to what we've witnessed in 2015. A period of sideways action, where the faith in crypto is slowly getting lost too, despite the fact of solid fundamental growth,” he wrote in recent thoughts on the crypto market.

“Right now, price of Bitcoin is nowhere near the valuation of the peak in November '21. It's down more than 50% and in a bear market of 490 days.”

An accompanying chart compared the current 490-day negative YoY returns to previous periods, with 2015 lasting 386 days.

Van de Poppe added that even positive news events, such as the future green-lighting of the United States’ first Bitcoin spot price exchange-traded fund (ETF), had not yet entered market consciousness.

“The thing is, during the current period, these events are not being reflected in price at all,” he wrote.

“They lag behind as the market is stuck in the 'bear market modus', as the past 2 years price has been falling.”
BTC/USD YoY performance annotated chart. Source: Michaël van de Poppe/X

PCE data follows muted crypto Jackson Hole reaction

Bitcoin and altcoins have displayed precious little regard for macroeconomic developments in recent weeks.

Even Federal Reserve interest rate changes and data releases such as the Consumer Price Index (CPI) have had a barely-perceptible impact on markets.

Last week’s comments from Chair Jerome Powell at the annual Jackson Hole Economic Symposium continued the trend, even as CME Group’s FedWatch Tool showed bets of a pause in rate hikes beginning next month at above 80%.

Fed target rate probabilities chart. Source: CME Group

This week, despite containing the Fed’s preferred inflation gauge in the form of PCE, could well end up no different.

PCE is due on Aug. 31, hours before the Bitcoin monthly close, with Sep. 1 offering nonfarm payrolls and unemployment data.

For macro markets, however, financial commentary resource The Kobeissi Letter promised an “action packed week.”

“Huge week for ALL things related to economic data, volatility is back,” it summarized in part of its latest X analysis.

Record hash rate reflects "miner bull run"

Could Bitcoin miners already be providing a silver lining for bulls into the end of the year?

Related: Bitcoin velocity hits lows last seen before Q4 2020 BTC price breakout

As Cointelegraph reported, one theory expects that Q4 will see miners bidding Bitcoin higher in preparation for the April 2024 block subsidy halving, which will cut their reward per mined block by 50%.

They should join “smart money” in doing so, creating a buzz of its own around the halving narrative, even if the broader market only tends to react to emission changes post factum.

Continuing the debate, James Straten, research and data analyst at crypto insights firm CryptoSlate, noted that Bitcoin hash rate is already headed into uncharted territory.

“The Bitcoin hash rate just hit 400 th/s for the first time ever. It is mind-blowing, considering the energy issues in Texas and the cost of electricity surging worldwide,” he told X subscribers.

“This is the miner bull run leading up to the halving next year. Similar explosive hash rate growth that led up to the 2020 halving.”
Bitcoin hash rate annotated chart. Source: James Straten/X

Hash rate is an estimation of the processing power dedicated to mining, and while impossible to measure exactly, figures from on-chain analytics firm Glassnode show not only new all-time highs, but a spate of upward adjustments contrasting with flat or downward-trending BTC price performance.

Last week, Bitcoin also saw one of its largest upward difficulty adjustments of 2023, taking the on-chain fundamental yardstick to all-time highs of its own.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked…

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4 hours ago

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March 11, 2024

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%. 

The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.

Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.

We find the rent expectations surprising because it is happening just asking rents are rising across the country.

At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.

Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."

Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.

Turning to household finance, we find the following:

  • The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
  • Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
  • Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
  • Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
  • At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."

Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months

Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.

Tyler Durden Mon, 03/11/2024 - 12:40

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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March 11, 2024

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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2 days ago

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March 9, 2024

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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