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BTC Held Down by USD
Bitcoin bulls still can’t catch a break as we move into the end of Q3. Following a rally over the last fortnight, BTC prices have once again turned lower, capped by local resistance. Following a solid start to the year, bullish momentum faded into April and despite a fresh push higher in July, prices have now cooled by around 20% from the YTD highs. The recent re-emergence of hawkish Fed expectations has been a major barrier for crypto bulls. With the Fed now expected to push ahead with at least one further hike, along with pushing out its expectations for rate cuts next year, the outlook for USD has turned more bullish, weighing on risk assets.
US Data on Watch
Given the fresh upside we are seeing in energy prices currently, upside inflationary risks are posing a major challenge to the outlook here. With the Fed now focused on a ‘higher for longer narrative’, BTC looks likely to remain hindered until that view changes. Looking ahead this week we have plenty of key US data to drive the action (final GDP, weekly unemployment, core PCE and UoM consumer sentiment) along with Powell speaking tomorrow also. Any further data strength will reinforce the current Fed narrative, weighing on risk sentiment. Additionally, If Powell is seen reaffirming the message from the FOMC last week this should keep BTC prices pressured through the end of the week.
Technical Views
BTC
The sell off in BTC has seen the market breaking through the rising trend line from YTD lows, as well as through the 27415 support level. Price recently stalled into the 24930 support, which remains for now. With momentum studies bearish, however, risks are pointed towards a further break lower which, if seen, opens the way for a test of 21390.
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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.