Bitcoin has been mostly
consolidating around recent lows as the hawkish repricing triggered by Fed
governor Waller’s remarks and the hot
US CPI weighed on the crypto market.
As a reminder, Fed’s
Waller not only said he would support a rate hike in December regardless of the
inflation data but also raised the possibility of a larger 50 bps move if
inflation comes in hotter than expected.
Sure enough, the
US CPI data came in above expectations and increased the probabilities of 50
bps hike. Following the CPI data, Fed’s Hammack also left a door open for a
larger rate increase. Traders are currently pricing in just a 12% probability
of a 50 bps hike, but those odds could climb further if more Fed officials
endorse the possibility or refrain from pushing back against it.
Meanwhile, US-Iran
negotiations remain in a deadlock. The WSJ reported that US Vice President
Vance is considering holding face-to-face talks with a senior Iranian security
official in an attempt to bring the conflict to an end.
However, separate
reports suggested that senior Iranian officials believe Washington is preparing
either further military strikes or tighter economic pressure in an attempt to
provoke a response from Tehran. There is clearly still a significant amount of
mistrust between the two sides, reinforcing the view that a diplomatic
breakthrough may not be as near as market expected.
Looking ahead, Bitcoin
will likely remain under pressure amid the negative macro backdrop. A more
dovish Fedspeak or a breakthrough in US-Iran negotiations, on the other hand,
could trigger a relief rally.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinis approaching the major
upward trendline. If the price gets there, we can expect the buyers to lean on
the trendline, with a defined risk below it, to position for a rally into the
98,000 level, with the downward trendline as the first target. The sellers, on
the other hand, will want to see the price breaking lower to increase the
bearish bets into the 67,000 level next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see the price has been trading inside a small falling channel. The sellers will
likely continue to lean on the top trendline, with a defined risk above it, to
keep targeting a break below the major upward trendline. The buyers, on the
other hand, will look for a break higher to pile in for a correction into the
major downward trendline.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the sellers will have a better risk to reward setup
around the upper bound of the channel, while the buyers will look for a breakout
or a rejection around the major upward trendline. The red lines define the average daily range for today.
UPCOMING CATALYSTS
Todaywe
get the latest US Jobless Claims figures. Tomorrow, we conclude the week with
the US PPI data.
This article was written by Giuseppe Dellamotta at investinglive.com.