BTC Rallies on Weaker USD
The pull-back in the US Dollar this week has benefited risk assets across the board and cryptocurrencies have been a reflection of this. Bitcoin traded up to its highest level since early June, fuelling hopes of a near-term bottom. The driver behind the move has been the shift in market sentiment ahead of next weeks FOMC meeting. On the back of record inflation in June, traders had been expecting the bank to go for a larger 1% hike. However, recent Fed commentary has poured cold water on this idea, leading to the pullback we’re seeing in USD. The stage is now set as we head into next week’s meeting. If the bank does refrain from a larger hike, we might well see USD correct lower still. This will be dependent on the bank’s forward guidance, however. In this scenario, Bitcoin is likely to see better demand and higher prices. On the other hand, if the Fed does opt for a larger hike, or is firmly hawkish in its guidance, USD will find its legs again, weighing on risk assets and dragging crypto lower.
Technical Views
Bitcoin
The rally off the YTD lows in Bitcoin has seen price breaking above the large falling wedge pattern which has framed price action over the decline this year. Price is currently stalled at the 24930 resistance level. However, while above the 20575 level the focus is on an eventual break higher, in line with bullish MACD and RSI readings, towards the 30175 level next.
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Written by James Harte
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.
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