FUNDAMENTAL OVERVIEW
Bitcoin has been consolidating since last
Wednesday, but the dovish Fed’s
Williams and Fed’s
Jefferson comments this week provided support for the cryptocurrency
despite the ongoing US-Iran stalemate.
Williams is the President of the New York Fed,
while Jefferson is the Fed Vice Chair. These two are part of the so-called
troika which also included the Fed Chair.
Their comments are generally the most influential
ones, and they triggered a dovish repricing that took October rate hike
probabilities from 70% to roughly 25% now.
Bitcoin has also extended the gains this morning
following a key technical breakout. Looking ahead, the focus will remain on
US-Iran developments and the Fed.
A breakthrough in negotiations could provide
further support for Bitcoin as expectations for aggressive Fed tightening will likely
get pared back further. Conversely, a prolonged stalemate or renewed escalation
would likely limit the upside unless the Fed keeps being more dovish than
market’s expectations.
Today, we
also have the US NFP report. Given Fed’s Williams and Fed’s Jefferson comments, we
will likely need a blockbuster report, with data beating expectations across
the board, to raise the probabilities for an October hike again. Such an
outcome could weigh on Bitcoin in the short-term on another hawkish repricing.
In-line or weaker than expected data, on the other hand, will likely
provide support to extend the recent rally.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinbounced from the broken
resistance-turned-support zone around the 82,500 level. If we get another
pullback into the support and the upward trendline, we can expect the buyers to
step in, with a defined risk below the trendline, to position for a rally into the
98,000 level. The sellers, on the other hand, will want to see the price
breaking below the trendline to pile in for a drop into the 76,000 support
next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price broke out of the 82,500 and 85,000 range this morning. If we get
a pullback, we can expect the buyers to step in around the 85,000 support, with
a defined risk below it, to keep pushing into new highs. The sellers, on the
other hand, will want to see the price falling back below the support to extend
the pullback into the major upward trendline 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 85,000 support or the major trendline to keep targeting new highs, while
the sellers will need downside breaks to position for new lows. The red lines
define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
conclude the week with the US NFP report.
This article was written by Giuseppe Dellamotta at investinglive.com.