FUNDAMENTAL OVERVIEW
Bitcoin has
been dragged lower by negative macro developments this week. The significant drop in
oil prices on growing expectations of a de-escalation and an earlier end to the
conflict supported the crypto market. At the UN General Assembly, though, Trump
poured some cold water on those expectations as he repeated that the US would
make a deal with Iran after the November elections.
The general risk sentiment started to deteriorate as oil prices began
rising again and dragged cryptocurrencies lower. Eventually the bearish
momentum increased yesterday after the US Flash PMIs showed a much stronger
growth than expected and triggered another hawkish repricing that sent Treasury
yields to new highs.
The focus will remain
on interest rates expectations and Middle East developments. If the markets start to sense an earlier end or we
get a surprising breakthrough, then we can expect oil prices to decline and
support Bitcoin. Conversely, if things remain unchanged or even re-escalate, we
can expect crude oil to remain supported into new highs and weigh on the crypto
market.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinhas pulled back to the broken
resistance-turned-support zone around the 82,500 level. This is where we can
expect the buyers to step in with a defined risk below the support to position
for a rally into the 90,000 level. The sellers, on the other hand, will want to
see the price falling below the support to pile in for a drop into the major upward
trendline around the 79,000 level next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we now
have a minor resistance zone around the 85,000 level. If we get a bounce from
the support zone, we can expect the sellers to step in around the resistance with
a defined risk above it to keep targeting a break below the support. The
buyers, on the other hand, will look for a break higher to increase the bullish
bets into the 90,000 level next.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, we have a minor downward trendline defining the bearish momentum on this
timeframe. We can expect the sellers to eventually split their positions and
lean on both the trendline and the 85,000 resistance to position for a break
below the support. The buyers, on the other hand, will look for upside breaks
to start piling in for new highs.
UPCOMING CATALYSTS
Todaywe have the Trump-Xi meeting and the US Jobless Claims
data, but the focus will remain on the US-Iran developments and interest rate
expectations.
This article was written by Giuseppe Dellamotta at investinglive.com.