NOIDA (CoinChapter.com)— Bitcoin’s price continued its decline on Aug. 28, reflecting broader market jitters as traders anticipate Nvidia’s upcoming earnings report. The drop is exacerbated by changing dynamics in the BTC futures markets.
This combination often signals weakening bullish momentum, suggesting that the current market sentiment could shift toward the downside.
Nvidia Earnings and Market Dynamics Could Be A Bearish Cue
The anticipation surrounding Nvidia’s earnings report has created ripples across financial markets, with Bitcoin no exception. Nvidia will release its Q2 results, with markets expecting the firm to show substantial growth driven by its dominance in the AI chip market.
However, the earnings report’s broader implications are fueling uncertainty among investors, leading to cautious repositioning in various asset classes, including cryptocurrencies.
This broader market hesitation partially drives Bitcoin’s recent price decline. As investors brace for potential volatility in the tech sector, sparked by Nvidia’s earnings, risk assets like Bitcoin are seeing reduced demand. This is evident in the futures markets, where key metrics are flashing bearish signals.
The funding rate for Bitcoin futures turned positive on Aug. 28 before doing a U-turn, suggesting that traders might not be ready to pay a premium for long positions. Moreover, the positive funding rate is accompanied by a decline in open interest, indicating that the market lacks conviction in the sustainability of the bullish trend.
Moreover, on-chain data reveals increased Bitcoin inflows to exchanges, signaling potential bearish pressure for Bitcoin price. Combined with the weakening futures market dynamics, these inflows suggest that traders prepare for further downsides.
The alignment of these bearish signals paints a bleak picture for Bitcoin price in the near term, especially with the looming uncertainty around Nvidia’s earnings and its impact on market sentiment.
Technical Setup Adds To Bearish Cues Against Bitcoin Price
Meanwhile, the BTC USD pair has formed a bearish setup called the ‘descending triangle.‘
Analysts identify the descending triangle as a bearish continuation pattern, characterized by a descending upper trendline that compresses price action into lower highs, while a flat lower trendline provides weakening support.
This setup intensifies selling pressure as rallies struggle to breach resistance, leading to progressively weaker buyer attempts. The battle between bulls and bears typically ends with a breakdown below the lower trendline.
Traders estimate the potential downside by measuring the vertical distance from the highest point of the triangle to the flat support line, projecting this distance downward from the breakout point.
Recently, BTC’s price dipped below the pattern, briefly indicating a bearish breakout. However, bulls managed to push the price back within the pattern, raising the possibility of a bull trap.
If the BTC/USD pair confirms the pattern, the token could drop more than 32%, with a target near $39,900.
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