Silent August for Bitcoin: Is a Big Breakout on the Horizon?

• Bitcoin’s price movement remains constrained, recording one of the quietest Augusts.
• Market indicators and whale activity suggest a potential major price breakout is brewing.

Quiet Times for Bitcoin Amid Historic Low Volatility

Despite the transformative capabilities blockchain offers and the fervor it usually stirs in markets, Bitcoin (BTC) has been noticeably silent, holding steady below $30,000. The restrained activity, often a rarity for the cryptocurrency market, is offering market aficionados a puzzle: will this quietude shatter soon?

In the backdrop, both bulls and bears are playing tug-of-war, but neither seems to be gaining ground. This stillness isn’t just a fleeting weekly phenomenon; Bitcoin’s performance has mirrored this sentiment over longer timeframes too.

Historical Metrics Pointing to an Upcoming Breakout?

Historical data and metrics suggest that change could be on the horizon. Whales, or large-scale BTC holders, are noticeably accumulating, aligning with the narrative that Bitcoin might be gearing up for its next significant breakout. Indicators such as the Bitcoin Historical Volatility Index (BVOL) depict a subdued landscape, reminiscent of patterns seen in early 2023, which was followed by a 70% Q1 uptick.

Furthermore, the Bollinger Bands, a key volatility indicator, is tightening, historically a precursor to a price movement. This compression is suggestive of an imminent price breakout. In Bitcoin’s lifetime, such tight Bollinger Bands have only been observed twice, once in September 2016 and then in January 2023, both followed by substantial market movements.

Whale Movements Bolster the Breakout Theory

Delving into on-chain activities offers further intrigue. Over the past couple of weeks, approximately ten Bitcoin whales, each holding a minimum of 1,000 BTC (equivalent to at least $29.4 million), have made their presence felt on the network. Such reaccumulation phases are generally indicative of a broader market movement.

Market analysts, using data from Glassnode, have highlighted the growth in the number of addresses with a balance of 1,000 BTC or more. The count has risen to 2,015 from 2,005 within the span of just two weeks. These signs underscore the growing belief among some experts that beneath Bitcoin’s calm exterior, the waters are churning.

Macro Influences in Play

In the wider economic sphere, the upcoming Federal Reserve minutes are keenly awaited. These minutes will shine a light on the Federal Open Market Committee (FOMC) members’ sentiments, especially given the interest rate hikes from the previous month. The crypto markets, like other risk assets, will be keenly observing for hints on rate policies, which could provide the impetus for Bitcoin’s next move.

While Bitcoin’s current performance has been muted, historical metrics, on-chain activities, and upcoming macroeconomic events are converging, hinting that a shift might just be around the corner.

Key Events This Week:

1. July Retail Sales data – Tuesday

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2. Building Permits data – Wednesday

3. Fed Meeting Minutes – Wednesday

4. Initial Jobless Claims – Thursday

5. Philly Fed PMI data – Thursday

6. Retail earnings including $WMT $TGT $HD

Big week for consumer data.

— The Kobeissi Letter (@KobeissiLetter) August 13, 2023