Bitcoin whipsawed yesterday following the FOMC decision. The Fed kept
interest rates unchanged as widely expected and Fed Chair Warsh said a whole
lot of nothing. Overall, the decision was a neutral event but failed to trigger
a sustained relief rally despite a drop in Treasury yields.
Meanwhile, the US-Iran negotiations remain at a
stalemate, although we’ve seen a stronger push this week. Semafor just reported
that the Trump administration is pursuing a temporary peace deal with Iran,
according to officials. However, if diplomacy fails, the US could resume
military operations shortly after the midterm elections, pending Trump’s
authorization.
We have a packed US economic calendar today, with GDP, PCE inflation and
Jobless Claims due for release. However, the figures are unlikely to materially
shift Fed expectations, given yesterday’s upward revision to the Fed’s growth
outlook and the fact that PCE can be estimated fairly accurately using the CPI
and PPI data. The Jobless Claims data should therefore be the most important, although
we would need a meaningful deterioration to move markets, as traders got
used to strong data.
A surprise breakthrough in US-Iran negotiations remains the key wildcard,
as it would drastically change the future outlook, leading to better growth
expectations and lower inflation concerns. In such a scenario, we can expect
Bitcoin to rally into new highs.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinis still consolidating around
recent lows. We have a downward trendline now defining the bearish structure.
If we get a pullback, we can expect the sellers to lean on the trendline, with
a defined risk above it, to position for a drop into the 75,000 level. The
buyers, on the other hand, will want to see the price breaking higher to pile
in for a rally into the 98,000 level next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor upward trendline defining the recent price action. The buyers will
likely step in around the trendline, with a defined risk below it, to keep
targeting a pullback into the downward trendline. The sellers, on the other
hand, will look for a break lower to pile in for a drop into the 75,000 level
next.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the buyers will have a better risk to reward setup
around the trendline, while the sellers will need a break to open the door for
new lows. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US GDP
report, the US PCE and the latest US Jobless Claims figures. Tomorrow, we
conclude the week with the US Employment Cost Index.
This article was written by Giuseppe Dellamotta at investinglive.com.