US dollar hits new 20-year high — 5 things to know in Bitcoin this week

Bitcoin (BTC) heads into the first week of September on a rocky road downhill after United States markets’ Jackson Hole rout.

After the U.S. Federal Reserve reinforced hawkish comments on the inflation outlook, risk assets sold off across the board, and crypto is still reeling from the aftermath.

A fairly nonvolatile weekend did little to improve the mood, and BTC price action has returned to focus on areas below $20,000.

In so doing, multiple weeks of upside have effectively disappeared, and in turn, traders and analysts expect a retest of the macro lows seen in June this year.

While all is now quiet regarding the Fed until the September rate hike decision, there is still plenty of room for upset as geopolitical uncertainty and inflation persist, the latter still increasing in Europe.

However, as last week, Bitcoin appears fundamentally resilient as a network, with on-chain data telling a different story to price charts.

Cointelegraph takes a look at five factors to consider when wondering where BTC/USD may head in the coming days.

Spot price triggers $18,000 target

Data from Cointelegraph Markets Pro and TradingView confirms no surprises for guessing what happened to BTC/USD into the latest weekly close.

After a comparatively uneventful weekend trading period, the pair sold off considerably at the end of Aug. 28, resulting in the lowest weekly close since early July.

A $2,000 red weekly candle thus sealed a miserable August for bulls, this following an initial $3,000 of losses the week prior.

With days until the monthly candle completes, the mood among analysts was understandably less than optimistic in the short term.

“Hoping we can see a recovery this week but the way equities closed Friday doesn’t look so hot,” trader Josh Rager summarized to Twitter followers in part of a weekend update.

Popular trading account Il Capo of Crypto nonetheless eyed the possibility for a brief squeeze to the upside before continuation of the downtrend.

Noting negative funding rates implying derivatives market bias towards straight losses, he predicted that $23,000 could reappear first.

“Much more people expecting 19k than those expecting 23k. Funding says it all. Also, there’s a lot of juicy liquidity above 21k. Squeeze those shorts,” he tweeted.

Responding, trader Mark Cullen noted that traders were “adding more BTC shorts in the area between 20.1 and 20.3k.”

“There is a nice inefficiency above there and another at around 20.9-21.1k. If it can break up it’s likely to be a fast move higher,” he added.

Amid various calls for $17,000 or lower, technical analyst Gert van Lagen gave a $17,500 floor target for the daily chart.

$BTC[1D]

White C-wave scenario I showed last Monday played out like clockwork. Double test of green box on daily.

C-wave looks final, time to bounce

Invalidation: 17.5k#BullMarket #Bitcoin https://t.co/acs6bFEl66 pic.twitter.com/DkhXmp3GDc

— Gert van Lagen (@GertvanLagen) August 28, 2022

In a slightly less cautious outlook, TMV Crypto meanwhile flagged $18,400 as a high-timeframe area of interest.

Traders prepare for further U.S. stocks declines

Last week’s bombshell of a speech by Fed Chair Jerome Powell sent shockwaves through risk assets worldwide.

According to one tally, Powell’s eight-minute address wiped over $2 trillion from global stocks, including $1.25 trillion in the U.S. alone.

#Fed‘s Powell has destroyed ~$2tn in global stock market cap with his 8-minute “Until the Job Is Done” Jackson Hole speech, makes $4.2bn loss per second. pic.twitter.com/05YE5yG693

— Holger Zschaepitz (@Schuldensuehner) August 28, 2022

“At some point, as the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases,” Powell said.

“Restoring price stability will likely require maintaining a restrictive policy stance for some time. The historical record cautions strongly against prematurely loosening…