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Bitcoin (BTC) starts a new week fresh from a new multi-week low amid a return of highly nervous sentiment.

After dipping below $21,000 over the weekend, the largest cryptocurrency is consolidating around 10% lower than a week ago, and the fear across crypto markets is clearly visible.

As some call for new lows and others warns of a difficult few months ahead, there is plenty for bulls to contend with on both long and short timeframes

The United States Federal Reserve’s annual Jackson Hole symposium is due this week, while September is already due to form something of a showdown when it comes to inflation and associated macro price triggers.

That could mean fresh volatility across risk assets both during and prior, something weary investors will no doubt not welcome after last week's escapades on BTC/USD.

The S&P 500 ended its four-week-long recovery last week after minutes from the Federal Reserve’s July meeting hinted that the central bank’s rate hikes will continue until inflation is under control. Members of the Fed said there was no evidence that inflation pressures appear be easing.

Another dampener was the statement by St. Louis Fed president James Bullard who said that he would support a 75 basis point rate hike in September’s Fed policy meeting. This reduced hopes that the era of aggressive rate hikes may be over.

Weakening sentiment pulled the S&P 500 lower by 1.29% for the week. Continuing its close correlation with the S&P 500, Bitcoin (BTC) also witnessed a sharp decline on Aug. 19 and is likely to end the week with steep losses.

Will bulls use the dips to accumulate at lower levels? If they do, let’s study the charts of the top-5 cryptocurrencies that may attract buyers because of their bullish setups.

BTC/USDT

Bitcoin slipped below the 20-day exponential moving average ($22,864) on Aug. 17 and then below the 50-day simple moving average ($22,318) on Aug. 19. The bulls are attempting to arrest the decline at the support line of the ascending channel.

Bitcoin (BTC) recovered modestly on Aug. 20 but remained on course to log its worst weekly performance in the last two months.

Bitcoin hash ribbons flash bottom signal

On the daily chart, BTC's price climbed 2.58% to $21,372 per token but was still down by nearly 14.5% week-to-date, its worst weekly returns since mid August. Nonetheless, some on-chain indicators suggest that Bitcoin's correction phase could be coming to an end.

That includes Hash Ribbons, a metric that tracks Bitcoin's hash rate to determine whether miners are in accumulation or capitulation mode. As of Aug. 20, the metric is showing that the miners' capitulation is over for the first time since August 2021, which could result in the price momentum switching from negative to positive.

Nonetheless, Bitcoin has been unable to shrug off a flurry of prevailing negative indicators, ranging from negative technical setups to its continued exposure to macro risks. Therefore, despite optimistic on-chain metrics, a bearish continuation cannot be ruled out. 

Here are three reasons why Bitcoin's market bottom may not be in yet.

On Friday, August 19, the total crypto market capitalization dropped by 9.1%, but more importantly, the all-important $1 trillion psychological support was tapped. The market's latest venture below this just three weeks ago, meaning investors were pretty confident that the $780 billion total market-cap low on June 18 was a mere distant memory.

Regulatory uncertainty increased on Aug. 17 after the United States House Committee on Energy and Commerce announced that they were "deeply concerned" that proof-of-work mining could increase demand for fossil fuels. As a result, U.S. lawmakers requested the crypto mining companies to provide information on energy consumption and average costs.

Typically, sell-offs have a greater impact on cryptocurrencies outside of the top 5 assets by market capitalization, but today’s correction presented losses ranging from 7% to 14% across the board. Bitcoin (BTC) saw a 9.7% loss as it tested $21,260 and Ether (ETH) presented a 10.6% drop at its $1,675 intraday low.

Some analysts might suggest that harsh daily corrections like the one seen today is a norm rather than an exception considering the asset’s 67% annualized volatility. Case in point, today’s intraday drop in the total market capitalization exceeded 9% in 19 days over the past 365, but some aggravants are causing this current correction to stand out.

The BTC Futures premium vanished

The fixed-month futures contracts usually trade at a slight premium to regular spot markets because sellers demand more money to withhold settlement for longer. Technically known as "contango," this situation is not exclusive to crypto assets.

Many owners of precious Bored Ape Yacht Club (BAYC) and CryptoPunks NFTs, who used them as collateral to take out loans in Ether (ETH), have failed to repay their debts. The situation could lead up to the NFT sector's first massive liquidation event.

BAYC "death spiral" incoming?

DoubleQ, the founder of web3 launchpad Double Studio, says lending service BendDAO could liquidate up to $55 million worth of NFTs to recover its loans, fearing the so-called "health factor" of these debts could fall below 1.

Notably, an NFT collection's floor price is important in determining the health factor. BendDAO offers 30%-40% of the NFT's floor price as loans. But the protocol sells the NFT if its floor price falls too close to the amount borrowed—a liquidation threshold, as explained below.

Meanwhile, the floor price of BAYC has fallen from 153.7 ETH in May to 69.69 ETH in August—a nearly 55% plunge in three months. Simultaneously, the health factor of at least 20 loans with BAYC as collateral has fallen to 1.1 as of Aug. 19, data on BendDAO shows.

Borrowers have 48 hours to repay the loan or their NFT collateral will be liquidated. According to doubleQ, these liquidations could lead to "a death spiral for the BAYC ecosystem and NFT market as a whole," given BendDAO's exposure to other NFT projects, including CryptoPunks and Doodles.

Bitcoin (BTC) is staging a repeat of price action from May with its latest drop, the latest data shows.

As the dust settles on a 6% comedown for BTC/USD, analysis argues that its trip to $25,000 was never meant to last.

Realized price comes back to haunt the BTC chart

After taking some by surprise with its magnitude, the latest snap losses for BTC price action are still playing out.

After falling from $23,800 to as low as $21,400 in a single hour, the largest cryptocurrency is now attempting to establish support near its realized price.

At just below $22,000, realized price refers to the sum total at which the entire BTC supply last moved.

Bitcoin (BTC) fell rapidly on Aug. 19 as the culmination of a week’s sideways action ended in disappointment for bulls.

New lows "just a matter of time

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it dropped 6.2% in a single hourly candle.

Reacting, traders hoped that a rebound could allow for consolidation higher than current spot price levels, which were under $22,000 at the time of writing.

“Well, hopefully that was liquidity seeking, otherwise it's over,” a gloomy Crypto Chase told Twitter followers.

Fellow account Il Capo of Crypto, who had long forecast a return to lower levels, was resigned to new lows being “just a matter of time.”

After an impressive 73% rally between July 13 and Aug. 13, Avalanche (AVAX) has faced a 16% rejection from the $30.30 resistance level. Some analysts will try to pin the correction as a "technical adjustment," but the network’s deposits and decentralized applications reflect worsening conditions.

To date, Avalanche remains 83% below its November 2021 all-time high at $148. More data than technical analysis can be analyzed to explain the 16% price drop, so let’s take a look at the network’s use in terms of deposits and users.

The decentralized application (DApp) platform is still a top-15 contender with a $7.2 billion market capitalization. Meanwhile, Solana (SOL), another proof-of-work (PoW) layer-1 platform, holds a $14.2 billion market cap, which is nearly twice as large as Avalanche's.

Avalanche’s TVL dropped 40% in two months

Some analysts tend to give too much weight to the total value locked (TVL) metic and although this might hold relevance for the decentralized finance (DeFi) industry, it is seldom required for nonfungible token (NFT) minting, digital item marketplaces, crypto games, gambling and social applications.

Using the layer-2 solution Polygon (MATIC) as a proxy, it currently holds a $2.2 billion TVL while MATIC’s market cap stands at $7.2 billion; thus, a 3.3x MCap/TVL ratio. Curiously, the same ratio applies to Avalanche, which currently holds a similar $2.2 billion TVL and $7.2 billion capitalization.

Bitcoin (BTC) briefly broke above $25,000 on Aug. 15, but the excitement lasted less than an hour and was followed by a 5% retrace in the next five hours. The resistance level proved to be tougher than expected but may have given bulls false hope for the upcoming $335 million weekly options expiry.

Investors’ fleeting optimism reverted to a sellers' market on Aug. 17 after BTC dumped and tested the $23,300 support. The negative move took place hours before the release of the Federal Open Markets Committee (FOMC) minutes from its July meeting. Investors expect some insights on whether the Federal Reserve will continue raising interest rates.

The negative newsflow accelerated on Aug. 16 after a federal court in the United States authorized the U.S. Internal Revenue Service (IRS) to force cryptocurrency broker SFOX to reveal the transactions and identities of customers who are U.S. taxpayers. The same strategy was used to obtain information from Circle, Coinbase and Kraken between 2018 and 2021.

This movement explains why betting on Bitcoin price above $25,000 on Aug. 19 seemed like a sure thing a couple of days ago, and this would have incentivized bullish bets.

Bears didn't expect BTC to move above $24,000

The open interest for the Aug. 19 options expiry is $335 million, but the actual figure will be lower since bears were overly-optimistic. These traders might have been fooled by the short-lived dump to $22,700 on Aug. 10 because their bets for Aug's options expiry extend down to $15,000.

Bitcoin (BTC) long-term holders are knuckling down as a record portion of the BTC supply stays dormant for years.

Data from on-chain analytics firm Glassnode confirms that the percentage of the supply now stationary for at least five years is higher than ever.

2017 BTC buyers not this year's sellers

Bitcoin has recovered almost 40% from its macro lows of $17,600 just two months ago, but for the cryptocurrency’s diamond hands, it has been a non-event.

Those who purchased BTC in 2017 or earlier continue to hodl their stake, and the trend points to more, not less, hodling in recent times.

Not content with the reversion above the 2017 highs of $20,000, long-term holders remain committed to not selling, the Glassnode data shows.

Bitcoin (BTC) shifted higher on Aug. 18 as the latest data confirmed the European Union’s highest ever inflation.

Support and resistance close in on BTC spot price

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD passing $23,500 at the time of writing, having preserved $23,000 as support overnight.

Concerns over a deeper risk asset drawdown had become widespread over the week, with Bitcoin and Ether (ETH) notably unable to crack long-term resistance levels.

With bulls seemingly on the back foot, the mood among analysts was naturally wary.

“BTC did break down from this huge rising channel/wedge everyone seems to be watching,” Daan Crypto Trades wrote in part of his latest Twitter update.

The Ethereum network’s long-awaited transition from proof-of-work to proof-of-stake is set to occur from Sept 15 to 16 and for the last year, traders and analysts have been discussing various outcomes for the upgrade and possible trading strategies. 

Let’s take a look at three options investors and traders have.

Hodl ETH to earn the expected “hardfork” token

The first strategy is relatively simple. Traders can simply buy Ether (ETH) in the spot market and hold it in their exchange wallet, or whatever platform/wallet will support forked tokens, and wait for the expected PoW token.

Way back in 2017, when Bitcoin was forked to Bitcoin Cash, BTC holders received an equal amount of BCH, which at one point traded for $1,650 per token. At the height of the 2021 bull market, BCH rallied as high as $800.

If PoW tokens from those entities that choose to ignore the Merge happens, then finding exchanges that support the hard forks would be the place to sell them. Don’t forget to pay your taxes if your country obligates you to do so.

Bitcoin’s (BTC) bounce fizzled out near $24,500 on Aug. 17, indicating that the recovery still faces stiff resistance from the bears. On-chain monitoring resource Material Indicators said the ask liquidity on the Fire Charts was similar to prior local tops.

Another reason for caution among crypto investors was that the recovery in the S&P 500 was reaching extreme overbought levels in the near term. Jurrien Timmer, director of global macro at asset manager Fidelity Investments, said that 88% of stocks in the S&P 500 were trading above their 50-day moving average, which was “stunning.”

Some were also cautious as Michael Burry, the investor who famously shorted the 2008 housing bubble, almost emptied his equity portfolio in the second quarter of this year in expectation of a sharp fall in the stock markets.

While the short-term looks uncertain, corporate investors who usually are in the game for the long term have increased their investments in the blockchain industry, including the crypto space. The top 40 publicly traded companies invested approximately $6 billion into blockchain startups between September 2021 to June 2022, according to a blog by Blockdata on Aug. 17. That is more than three times the $1.9 billion invested by corporations between January 2021 to September 2021.

What are the critical levels on the downside that will suggest that the recovery could be faltering? Let’s study the charts of the top-10 cryptocurrencies to find out.

Bitcoin (BTC) dropped to weekly lows at the Aug. 17 Wall Street open as upcoming Federal Reserve comments unsettled risk assets.

Dollar climbs as Fed minutes due

Data from Cointelegraph Markets Pro and TradingView tracked a more than 2% daily decline in BTC/USD, which hit $23,325 on Bitstamp.

Already showing signs of weakness, the pair slid further as United States equities began trading, hours before the Federal Open Markets Committee (FOMC) was due to release minutes from its latest meeting.

While not involving a decision on interest rates, the meeting was cued to give an insight into the Fed’s thinking in terms of the next rate tweak due in September.

“The important event tonight with the FOMC minutes, through which information can be received whether the FED is going to be hawkish or dovish,” Cointelegraph contributor Michaël van de Poppe summarized in his latest Twitter update.

Manchester United Fan Token (MUFC) is a dead coin and not related to the sports franchise, but one Elon Musk tweet was enough to revive it on Aug. 17.

Fake Man U token pumps after Elon Musk's tweet

To clarify, MUFC is not an official Manchester United crypto token. It came to life in August 2021 after a team of programmers, who are said to be hardcore Manchester United fans, falsely claimed that holding MUFC would give buye influence on the football club's decisions.

The team later conducted an "airdrop" round of 10,000,000,000 MUFC in November 2021, promising to provide 10,000 MUFC to users who followed its official social media handles. The prospects of getting free MUFC tokens helped its price rally to as high as $1.

But the project turned out to be vaporware, eventually leading MUFC down by 100% after November. It was deemed extinct until a tweet from billionaire entrepreneur Elon Musk on Aug. 17 revived it from oblivion.

The Tesla CEO tweeted that he would buy the Manchester United football club, which he later admitted was a "long-running joke."

EOS rose approximately 20% to reach $1.66 on Aug. 17 and was on track to log its best daily performance since May 2021.

Initially, the EOS rally came in the wake of its positive correlation with top-ranking cryptocurrencies like Bitcoin (BTC) and Ether (ETH), which gained over 2% and 3.75%, respectively. But, the upside move was also driven by a flurry of uplifting updates emerging from the EOS ecosystem.

EOS incentive program launch

On Aug. 14, the EOS Network Foundation (ENF), a nonprofit organization that oversees the growth and development of the EOS blockchain, opened registrations for its upcoming Yield+ incentive program.

The Yield+ is a liquidity incentive and reward program to attract decentralized finance (DeFi) applications that generate returns for their users. In doing so, the service attempts to compete with its top blockchain rivals in the DeFi space, namely Ether, Cardano (ADA), and Solana (SOL).

Since the beginning of Yield+ registration, the total value locked (TVL) inside the EOS pools has increased from 94.71 EOS to 102.18 EOS, showing a temporary spike in demand for the tokens. The TVL will likely increase in the days leading up to the reward activation on Aug. 28.

Bitcoin (BTC) returned to range resistance on Aug. 17 amid ongoing concerns that a retracement is imminent.

No success for Bitcoin bulls

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD hitting $24,448 on Bitstamp, up 3.25% from the previous day’s low before diving $600 in under an hour.

The momentum gained speed on the day, but the bulls faced familiar resistance at levels keeping them broadly in check since mid-June. The past week’s trips to $25,000 and beyond remained brief breakouts beyond a two-month price ceiling.

Analyzing the scenario, veteran trader Peter Brandt eyed a rising wedge setup in progress for Bitcoin with $20,700 as its starting point.

On-chain monitoring resource Material Indicators was less convinced about the staying power of the current rally.

Play-to-earn (P2E) blockchain-based games gathered investors’ attention in late 2021, with Axie Infinity leading the pack with over 2 million active users. In P2E games, players are awarded tokens or nonfungible token assets (NFTs) as they progress throughout the game. These digital assets can be sold using marketplaces and cryptocurrency exchanges, generating income in a decentralized manner.

However, there is a large discrepancy between P2E and traditional PC and console gaming experiences. In that sense, crypto games are a couple of decades behind due to the restrictions imposed by blockchain technology.

Yes, most crypto games lack a decent user experience

Although the promise of AAA-level crypto games eventually developing exists, so far, most of the launches gravitate toward digital trading card battles, decentralized finance disguised as role-playing games, and collectibles.

Unsurprisingly, crypto games critics focus on the lack of fun, or a comparable user experience versus the traditional market, as pointed out by analyst Udi Wertheimer.

According to Anton Link, the CEO of NFT renting and leasing protocol Unitbox Protocol: