After consolidating around the $60,000 level for much of the previous week, bitcoin managed a surprising rally last Friday, August 23rd, closing the week near $64,000 and placing it back within the range-bound price action between $60,000 and $70,000 observed since March of this year.

However, as the final weekend of August came to a close, bitcoin failed to sustain this momentum, ultimately losing over 7% by Tuesday. The decline continued into Wednesday, with bitcoin dipping as low as $57,850, marking an 11% drop from its recent high.

Move Below $60,000 Spurs Long Liquidations

Tuesday’s over 5% drop triggered the highest number of long liquidations since August 4th, with nearly $300 million in long positions liquidated across leveraged exchanges. This wave of liquidations likely resulted from traders placing stop-loss orders just below the critical $60,000 psychological level, causing a cascading effect once this key support was breached.

Impact of Presidential Betting Odds on Bitcoin Price

Bitcoin’s recent price action may have been influenced by shifts in the presidential betting odds for the upcoming election. Over the past few weeks, Trump’s betting odds have narrowed relative to Harris’s, with Trump losing his previously sizable lead. This change was initially viewed as bullish for the crypto market, given Trump’s pro-crypto stance.

As mentioned in previous newsletters, bitcoin’s price movements have shown a correlation with the favored candidate in prediction markets. When Robert F. Kennedy Jr. endorsed former President Trump, this appeared to give Trump a slight edge, with a marginal 0.1% lead over Harris according to platforms like Polymarket. This shift might have contributed to bitcoin’s brief break above the $60,000 level the prior week.

Bitcoin Dominance Maintains Control

Despite the overall market weakness, bitcoin’s dominance remains robust, currently sitting at 57.35%. While bitcoin declined about 8% this week, many altcoins saw double-digit losses, underscoring bitcoin’s relative strength as a store of value within the broader crypto space amid ongoing bearish conditions.

Bitcoin Exchange Balance Makes A New All-Time Low

An important on-chain metric, the bitcoin balance on exchanges, has been signaling bullish trends over the past few weeks. The exchange balance has fallen to a new low of 2.39 million bitcoin this week. At the peak price of $74,000 earlier this year, there were 2.68 million bitcoin available on exchanges. This represents nearly an 11% decrease from the peak in March.

This data is significant as it suggests that, even as bitcoin’s price has been trending sideways to bearish over the past month, more coins are being moved off exchanges. This could be a bullish sign for bitcoin markets, indicating that investors are accumulating bitcoin and moving it into cold storage, thereby reducing supply on exchanges and potentially increasing future demand for both existing and newly mined bitcoin.

Bitcoin’s August Monthly Close

Bitcoin closed the month of August just short of the $59,000 level. Although this sideways price action may be frustrating for bitcoin bulls hoping for more upside, it is nonetheless a positive sign to see bitcoin more or less maintaining its monthly highs from 2021, where bitcoin had a couple of monthly closures between the upper $50,000s and lower $60,000s.

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