Bitcoin tanked yesterday following the higher than expected US Core CPI,
but the minor changes in rate hike expectations and the dovish repricing
further out the curve, suggest the market might be starting to get more
concerned about the growth outlook.
It’s interesting that stocks, copper, crypto, the US dollar and yields are
all trading lower today, while gold has regained all the losses. It feels more
like a stagflationary environment where risk assets and the US dollar generally
underperform, while gold outperforms.
Looking ahead, we have the Flash PMIs, the FOMC, the US-Iran
negotiations and the US midterm elections as key catalysts. If the economic data
starts pointing to deteriorating economic conditions, then we could see the
market getting increasingly worried about growth.
This would be negative for risk sentiment and could further weigh on Bitcoin
and the crypto market in general. What could change the picture completely would
be an end to the US-Iran war, as that would immediately improve the growth
outlook.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoin has tested a couple of times
the support zone around the 80,000 level. The buyers will likely continue to
step in around the support, with a defined risk below it, to keep targeting a
rally into the 98,000 level. The sellers, on the other hand, will want to see
the price breaking lower to pile in for a drop into the 75,000 level next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a minor resistance around the 84,000 level. If we get a rebound from the
support, 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 87,400 level next.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see the price broke below the minor support around the 83,000 level yesterday
after the US CPI release and extended the losses as more sellers piled in to
target the 80,000 support. There’s not much we can add here, as the buyers will
likely continue to step in around the 80,000 support to target new highs, while
the sellers will look for a break to extend the drop into new lows. The red
lines define the average daily range for today.
UPCOMING CATALYSTS
Today we get the US PPI, the
US Retail Sales and the latest US Jobless Claims figures. We have also Fed
Chair Warsh speaking very late in the day in a fireside chat with IMF Managing
Director Georgieva. He’s against forward guidance, so he’s unlikely to give any
policy signal, but it’s worth keeping an eye on it.
This article was written by Giuseppe Dellamotta at investinglive.com.
