FUNDAMENTAL OVERVIEW
Bitcoin surged
on Friday after a CFTC
crypto rulemaking submission on Thursday became public.The filings were submitted for
regulatory review after the CLARITY Act failed to advance in the Senate earlier
in the week. The CFTC has effectively signalled that it intends to
move forward with a crypto market framework using its existing authority rather
than waiting for Congress.
Yesterday, we saw the momentum in bitcoin picking up
further after the cryptocurrency broke out of its month-long range. That might
have been caused by short-covering after such a major breakout. Finally, Strategy resumed Bitcoin purchases, buying
another 950 BTC for approximately $75.7 million. That’s not large, but it’s
symbolically important because Strategy had paused purchases for several weeks.
On the macro side, the less hawkish than expected Fed dot
plot gave the crypto market the green light for a rebound, and the gains then
extended due to idiosyncratic catalysts, the fall in oil prices, Middle East
de-escalation hopes and a broad positive risk sentiment.
The market’s focus is now on the UN General Assembly, as Trump called a
meeting with Gulf leaders on the sidelines to discuss the next steps in the war
with Iran. The Iranian delegation was also allowed to participate in the
Assembly, so there will likely be a meeting between Trump and Iranian President
Pezeshkian. Keep in mind that a de-escalation would send oil prices lower, further
easing inflation and rate hike concerns and ultimately support risk sentiment
and Bitcoin.
Economic data will also be important given the current market’s pricing.
When positioning and market expectations become stretched, even a modest shift
in the data can trigger a significant reversal. If US data starts surprising to
the downside, expectations for aggressive rate hikes will likely be reduced, potentially giving Bitcoin an additional boost.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinbroke out of the month-long
range and opened the door for a rally into the 98,000 level next. We now have a
new major upward trendline that could act as support. If we get a pullback into
the trendline, we can expect the buyers to lean on it with a defined risk below
it to keep targeting new highs. The sellers, on the other hand, will look for a
break lower to extend the drop into the 76,000 support.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
an upward trendline defining the bullish momentum on this timeframe. If we get
a pullback, we can expect the buyers to lean on the trendline with a defined
risk below the 82,500 support to keep pushing into new highs. The sellers, on
the other hand, will want to see the price falling back below the 82,500 support
to extend the drop into the major trendline.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, there’s not much we can add here but from a risk management perspective,
the buyers will have a better risk to reward setup around the trendline and the
82,500 support to position for further upside, while the sellers will need a
break below the support to extend the correction into the daily trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Today, we have Trump meeting
with Gulf leaders and potentially with Iran’s President at the UN General
Assembly. Tomorrow, we get the Flash US PMIs. On Thursday, we have the Trump-Xi
meeting.
This article was written by Giuseppe Dellamotta at investinglive.com.