Fundamental
Overview
Bitcoin had a good
performance at the start of last week following the US CPI report as the data
came mostly in line with expectations. In the following days though, we got
some hottish data with the US PPI beating expectations by a big margin, the US
Jobless Claims improving further and the inflation expectations in the UMich
survey surprising to the upside.
Following the data, traders
turned their attention to Fed Chair Powell’s speech at the Jackson Hole Symposium
on Friday. The risk of something hawkish led to profit-taking and some hedging
into the event, which eventually turned into a deeper pullback.
Most likely, Powell won’t
pre-commit to anything and just reiterate that they will decide based on the
totality of the data. This is the baseline expectation. If he were to signal a
rate cut in September, then Bitcoin will likely rally as hedges get unwound.
Conversely, if he were to
close the door for September by saying something like “we might not have enough
data to consider a rate cut in September”, it would be interpreted as hawkish,
and we could see more downside for the cryptocurrency.
Bitcoin
Technical Analysis – Daily Timeframe
Bitcoin Daily
On the daily chart, we can
see that Bitcoin pulled all the way back to the key support
around the 111,900 level. This is where we can expect the buyers to step in
with a defined risk below the level to position for a rally into a new all-time
high. The sellers, on the other hand, will want to see the price breaking lower
to increase the bearish bets into the 100,000 level next.
Bitcoin Technical
Analysis – 4 hour Timeframe
Bitcoin 4 hour
On the 4 hour chart, we can
see that we have a minor downward trendline
defining the bearish momentum on this timeframe. The sellers will likely
continue to lean on the trendline to keep pushing into new lows, while the
buyers will look for a break higher to increase the bullish bets into a new
all-time high.
Bitcoin Technical
Analysis – 1 hour Timeframe
Bitcoin 1 hour
On the 1 hour chart, we can
see that we have a minor resistance zone around the 114,500 level with the
trendline for confluence. That would be a good spot for the sellers where to
pile in with a defined risk above the trendline. The buyers, on the other hand,
will need to break to the upside to invalidate the bearish setup and reverse
the recent trend. The red lines define the average daily range for today.
Upcoming
Catalysts
Today we have Fed’s Waller speaking and
the FOMC meeting minutes. Tomorrow, we get the US Flash PMIs as well as the US
Jobless Claims figures. Finally, on Friday, we conclude the week with Fed Chair
Powell speech at the Jackson Hole Symposium.
