FUNDAMENTAL OVERVIEW
Bitcoin has been consolidating since last
Wednesday, with ongoing US-Iran tensions keeping a lid of further gains. The
backdrop has improved somewhat, however, as renewed optimism around the
negotiations has helped ease concerns over an escalation.
The US and Iran remain engaged in talks aimed at
reaching an agreement on Tehran’s proposal to reopen the Strait of Hormuz
within seven days under certain conditions. The latest reports suggest that the
main disagreement is now over the sequencing and implementation of the
measures, rather than the substance of the proposal itself.
Bitcoin also received some support from Fed’s Williams
yesterday. He said there was no urgency to raise rates following the September
hike and that another increase would likely be appropriate if the economy
continued to perform as expected. His comments triggered a dovish repricing in
rate expectations, with the probability of an October hike falling from around
70% to roughly 45%.
Looking ahead, US-Iran developments will remain
the key focus. A breakthrough in negotiations could provide further support for
Bitcoin as expectations for aggressive Fed tightening will likely get pared
back. Conversely, a prolonged stalemate or renewed escalation would likely keep
risk sentiment under pressure and limit Bitcoin’s upside.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoinis consolidating at the broken
resistance-turned-support zone around the 82,500 level. From a risk management
perspective, the buyers will have a better risk to reward setup around the
upward trendline to keep pushing into new highs, while the sellers will want to
see the price breaking lower to extend the drop into the 76,000 support next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we can
see more clearly the consolidation between the 82,500 support and the 85,000
resistance. The buyers will continue to step in around the support, with a
defined risk below it, to keep targeting a rally into the 90,000 level. The
sellers, on the other hand, will look for a break lower to extend the pullback
into the major trendline.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour
chart, there’s not much we can add here as the market participants will likely
continue to play the range by buying at support and selling at resistance until
we get a breakout on either side.
UPCOMING CATALYSTS
Todaywe
have the US ADP and the US PCE price index. Tomorrow, we get the US ISM
Manufacturing PMI and the latest US Jobless Claims figures. On Friday, we
conclude the week with the US NFP report. The focus, though, will remain on
US-Iran developments.
This article was written by Giuseppe Dellamotta at investinglive.com.