Bitcoin Price Analysis: BTC Starts Week On Positive Note, Reclaims $112,000

Bitcoin (BTC) has started the week in positive territory, up nearly 1%, trading around $112,000. Despite the recovery, the flagship cryptocurrency risks a deeper drop if it fails to clear the resistance around the $114,000-$115,000 zone. 

BTC’s recovery has been muted despite softer US jobs data ahead of the crucial FOMC meeting. 

Bitcoin (BTC) Treasury Firms Could Face Difficulties 

Bitcoin treasury firms could face a difficult time as premiums fall. Analysts believe the situation could worsen in the near future unless the firms take corrective measures. According to New York Digital Investment Group (NYDIG) global head of research Greg Cipolaro, the rising gap between stock price and Net Asset Value (NAV) of major Bitcoin treasury firms like Strategy and Metaplanet continues to compress even as BTC hits record levels. Cipolaro stated, 

“The forces behind this compression appear to be varied. Investor anxiety over forthcoming supply unlocks, changing corporate objectives from DAT management teams, tangible increases in share issuance, investor profit-taking, and limited differentiation across treasury strategies.”

Crypto treasury firms have become the latest trend on Wall Street, generating billions over the past year. However, Cipolaro believes Bitcoin treasury firms are in for a “bumpy ride” as they await mergers or financial deals to go public. This could result in a substantial wave of selling from existing shareholders. He also believes that some Bitcoin treasury companies are trading below the value of recent fundraises, and a sharp price drop could spell trouble. 

El Salvador Celebrates Bitcoin Milestone 

El Salvador’s Bitcoin Office celebrated a major milestone on Sunday, marking four years since the Central American nation made BTC legal tender and adopted pro-BTC legislation. El Salvador’s Bitcoin Office highlighted the fact that El Salvador was the first country to establish a strategic Bitcoin reserve, and currently holds 6,313 BTC, valued at over $700 million. It has also initiated several Bitcoin and artificial intelligence education initiatives. However, El Salvador has since repealed its Bitcoin legal tender law and has scaled back government involvement in Bitcoin and crypto. 

Michael Saylor’s Strategy Announces Latest Bitcoin (BTC) Purchase 

Michael Saylor’s Strategy completed the purchase of 1,955 BTC for $217 million between September 2 and 7, according to a filing with the United States Securities and Exchange Commission (SEC). The company purchased the asset at an average price of $111,196 per coin, with the price briefly crossing the $113,000 mark before settling around $110,000. The latest acquisition takes Strategy’s Bitcoin holdings to 638,460 BTC, purchased for $47.2 billion. The purchase comes after a series of acquisitions in August, totaling 7,714 BTC. 

Bitcoin Mining Difficulty Climbs To All-Time High 

The Bitcoin mining difficulty jumped to a new all-time high of $134.7 trillion on Friday. Network difficulty has been steadily rising despite predictions that it would decrease. Meanwhile, Bitcoin’s hashrate, the average of the total number of hashes per second from all miners on the network, fell to 967 billion hashes per second from an all-time high of over 1 trillion hashes per second. Higher network difficulty has led to tighter operating margins for miners in an already competitive industry with narrow profit margins. 

Bitcoin (BTC) Price Analysis 

Bitcoin (BTC) has started the week on a bullish note, reclaiming the $112,000 mark and moving to $112,650. The flagship cryptocurrency faced volatility last week but failed to cross the resistance around $114,000 despite rising to an intraday high of $113.390. Sellers retained control on Saturday as the price fell 0.41% to $110,212. However, it recovered on Sunday, rising nearly 1% to end the week at $111,129. 

BTC has been stuck below key resistance levels, indicating subdued market activity as investors wait for next week’s highly anticipated interest rate cut decision. Price action has been muted despite August non-farm payrolls rising by 22,000, substantially lower than the estimated 75,000. Weak data suggest the economy may be cooling, giving the Federal Reserve room to consider an interest rate cut. The Federal Reserve is expected to decide on rate cuts on September 17, with the CME FedWatch tool indicating a 100% probability of an interest rate cut. According to Rachael Lucas, analyst at BTC Markets, the US jobs report has created the expectation of a dovish stance by the Federal Reserve regarding rate cuts. 

“The soft U.S. jobs report did create expectations for a more dovish US Federal Reserve, which is normally supportive for risk assets like bitcoin. However, the market had already priced in some degree of policy easing. At the same time, we're seeing profit-taking by institutional desks, while ETF flows remain relatively flat.”

However, some analysts believe that even if the Fed cuts interest rates, BTC price action will remain subdued. Kronos Research CIO Vincent Liu stated, 

“A cut may reflect economic weakness, while sticky inflation and cautious risk sentiment limit risk appetite. Without stronger ETF inflows or real liquidity expansion, $120K+ remains a tough barrier.”

BTC registered a sharp drop on Friday (August 29), dropping nearly 4% to $108,378. The price recovered on Saturday, rising 0.41%, but was back in the red on Sunday, falling 0.53% to settle at 108,247. Price action was positive on Monday as BTC rose almost 1% to cross $109,000 and settle at $109,240. Bullish sentiment intensified on Tuesday as the price rallied, increasing 1.84% to cross $111,000 and settling at $111,247. BTC posted a marginal increase on Wednesday, rising 0.46% to $111,756.

Source: TradingView

Despite the positive sentiment, BTC lost momentum on Thursday, dropping to an intraday low of $109,321 before settling at $110,720. The price rallied to an intraday high of $113,390 on Friday but couldn't stay at this level. As a result, it fell to $110,670, ultimately registering a marginal decline. Price action was mixed over the weekend, with BTC falling 0.41% on Saturday and settling at $110,212. It recovered on Sunday, rising nearly 1% to reclaim $111,000 and settle at $111,129. Bullish sentiment has picked up during the ongoing session, with the price up 1.50% at $112,792.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.