Fundamental
Overview
Bitcoin rallied strongly on
Friday as Fed Chair Powell tilted more dovish. Traders firmed up expectations
for a rate cut in September which now stands around 84% probability with a
total of 54 bps of easing by year-end.
The gains started to fade
the following day though and the price continued to fall for several days. There
was no clear catalyst for the selloff, so it might be technically driven. Nonetheless,
the focus has now shifted to the US NFP report next week which is going to be
crucial and will influence greatly interest rates expectations.
Strong data might take the
probability for a September cut towards a 50/50 chance but will certainly see a
more hawkish repricing further down the curve which could weigh on bitcoin in
the short-term.
Soft data, on the other
hand, will likely see traders increasing the dovish bets with a third cut by
year-end being priced in and likely support the cryptocurrency.
Bitcoin
Technical Analysis – Daily Timeframe
Bitcoin Daily
On the daily chart, we can
see that Bitcoin is trading below the key support level at 111,900. The sellers will likely
continue to pile in around these levels with a defined risk above the 111,900
level to position for a drop into the 100,000 level. The buyers, on the other
hand, will want to see the price rising back above the 111,900 level to pile in
for a rally into the 123,000 level next.
Bitcoin Technical
Analysis – 4 hour Timeframe
Bitcoin 4 hour
On the 4 hour chart, we can
see that we have a downward trendline defining the bearish momentum. 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 upward trendline defining the bullish momentum on this
timeframe. The buyers will likely lean on the trendline to keep targeting new
highs, while the sellers will look for a break lower to extend the selloff into
new lows. The red lines define the average daily range for today.
Upcoming
Catalysts
Tomorrow we get the latest US Jobless Claims
figures. On Friday, we conclude the week with the US PCE price index.
