FUNDAMENTAL
OVERVIEW
Bitcoin had a
volatile end to last week. On Thursday, the price spiked to the upside after
some dovish Fed’s
Waller comments. Since he deviated from his usual hawkish stance, it
triggered a dovish repricing in interest rate expectations which lowered the
probabilities for a September rate hike.
On Friday, bitcoin
erased most of its Waller-driven gains as the US NFP report showed job growth in August almost tripling the
consensus estimate of 56K. This triggered a hawkish repricing which saw the
probabilities for a rate hike in September returning to pre-Waller levels.
This week, all eyes will be on the US CPI
data. Unless, we get some surprising breakthrough in US-Iran relations, the
price action will likely remain mostly rangebound or a bit negative for Bitcoin
as traders at some point might start hedging into the CPI release.
A soft or in-line CPI will likely give Bitcoin
a boost as Fed’s Waller mentioned that he won’t consider a rate
hike unless we get a hot CPI. Conversely, an upside
surprise in core monthly inflation data will likely trigger another selloff on
a hawkish repricing.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoin spiked into the key 82,500 resistance after Waller’s dovish
comments. The sellers stepped in there with a defined risk above the resistance
to position for a drop back into the 76,000 support. The buyers will want to
see the price coming back into the support to position for a rally into the
98,000 level next or wait for a break above the 82,500 resistance.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a downward trendline defining the bearish momentum triggered by the strong NFP
as the market started to fade Waller-driven gains. If the price pulls back into
the trendline, we can expect the sellers to lean on the trendline with a
defined risk above it to keep pushing into the support. The buyers, on the
other hand, will want to see the price breaking higher to pile in for a rally
into the resistance, targeting a breakout.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we
have another minor downward trendline which could act as resistance. The sellers
might want to split their short positions in half to use both trendlines to
target new lows. The buyers, on the other hand, will look for trendline breaks
to pile in for a rally into the 82,500 resistance. The red lines define the average daily range for today.
UPCOMING CATALYSTS
On Thursday, we get the
US PPI report and the US Jobless Claims figures. On Friday, we conclude the
week with the US CPI report.
This article was written by Giuseppe Dellamotta at investinglive.com.