Crypto traders could be de-risking ahead of the US Federal Reserve’s Jackson Hole symposium.
Bitcoin (BTC) returned to $116,000 after Monday’s Wall Street open as bulls fought to set off a short squeeze.
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD stemming overnight losses, which saw a retreat to near $115,000.
The cross-crypto sell-off had liquidated around $500 million in long positions in 24 hours at the time of writing, per data from CoinGlass.
Traders, already wary of market weakness, continued to forecast fresh lows for Bitcoin and altcoins.
“This is probably the worst case scenario for $BTC now. It’ll continue to consolidate between $112K-$120K in Q3, while alts will head higher,” popular trader BitBull wrote in part of his latest X analysis.
“We could even see a capitulation wick below $112K, just like we had a pump above $124K.”
Crypto trader, analyst and entrepreneur Michaël van de Poppe agreed.
“If Bitcoin doesn’t break $116.8K, I assume we’ll see a sweep of the lows, and that’s going to be the moment that everyone says ‘start of bear market’, then you buy,” he summarized.
Exchange order books nonetheless revealed that many traders held a more categorical view of short-term price action.
Speculative Ether (ETH) traders, finance and trading resource Barchart noted on the day, had now built the largest-ever leveraged short position on the altcoin.
Some saw the potential for a short squeeze to come next, with X analytics accounts focusing on both BTC and a “cluster” of ETH shorts.
CoinGlass confirmed that a key short liquidation level for BTC/USD was at $116,500.
Considering the reasons for the drawdown, trading firm QCP Capital pointed to macroeconomic factors.
Related: Dip buyers ‘stopped the train,’ 5 things to know in Bitcoin this week
The US Federal Reserve’s annual Jackson Hole symposium this week is a classic de-risking event for traders, it said, while inflation remains a hot topic.
“Sideways trade seems likely, with dips near 112k attracting buyers and rallies toward 120k meeting supply, at least until Friday when Fed Chair Jerome Powell takes the stage,” it forecast in its latest “Asia Color” post.
“Thursday’s higher‑than‑expected PPI numbers (producer prices jumped 0.9% month‑on‑month against a 0.2% forecast) have complicated the Fed’s policy framework, so the market will be looking for hints on the Fed’s thinking ahead of its September policy meeting.”
QCP added that Powell’s 2024 Jackson Hole speech had contained useful points for future policy easing.
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.
