Today's CPI print in the U.S. spooked the market, affecting Bitcoin, which dropped more than 4% within merely two minutes. The report of higher-than-expected inflation shattered market participants' last hopes for the FED pivot. Currently, the FED is expected to raise interest rates in the range between 75bps to 100bps during its September meeting. However, after this latest inflation print, there is a high likelihood of the FED proceeding with another significant rate hike in November.
These developments only add to the already bearish fundamentals that signal a rough road ahead for Bitcoin. With a slowing economy, higher servicing of debt, and other geopolitical burdens, we think cryptocurrencies will copy the stock market on its route to new lows.
The same view is also supported by technical factors and low volume, which point to the liquidity crisis rather than a trend change from bearish to bullish. Because of this conviction, we stick to our bearish outlook. Accordingly, our price targets are 17 500 USD and 15 000 USD.
Illustration 1.01 Illustration 1.01 shows the 1-minute chart of BTCUSD and the sudden crash after the CPI print.
Technical analysis - daily time frame RSI reversed and now points to the downside, which is very bearish. Stochastic also turned bearish. MACD started to flatten. DM+ and DM- produce whipsaws. The daily time frame quickly turned from neutral/slightly bullish to very bearish.
Illustration 1.02 Illustration 1.02 shows the daily chart of BTCUSD and the most recent technical developments. The failure of Bitcoin to stay above the immediate resistance is very bearish.
Technical analysis - weekly time frame RSI, Stochastic, and MACD are neutral. DM+ and DM- stay bearish. Overall, the weekly time frame is neutral.
Illustration 1.03 The picture above shows simple support and resistance levels for BTCUSD.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
@FieryTrading, Thank you very much for sharing your work and coins. I think the market will just continue lower. I wish you the best.
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Beautiful and to the point post.
Bulls take note! Historically, September has typically been the worst performing month in the stock market. That being said, these are unchartered territories -anyone resembling these times to 1970s/1980s, is dead wrong. $2 quadrillion outstanding derivatives waiting in the wings to come down. The higher the interest rates, the closer the needle gets to the bubble. The Great Depression of 1929 will look like a correction by comparison.
Hey TradersWeekly, you continue to put out high quality material, and most of all, it’s all on the pertinent subjects of the moment. Much appreciated! 👍