As Bitcoin enters an important week, market participants are closely monitoring several key indicators and events that could determine its immediate trajectory. Popular crypto analyst Ted (@tedtalksmacro) provided an in-depth analysis, highlighting the key factors at play.
Weekly Bitcoin preview
Ted’s analysis begins by covering the broader macroeconomic environment. Last week’s data for the US Consumer Price Index (CPI) and Producer Price Index (PPI) were positive for risk assets, highlighting the continued downward trend in inflation. “Both the CPI and PPI data were positive for risk assets, each indicating that the downward trend in inflation remains,” Ted noted. However, he cautioned that the Federal Reserve’s communications suggested the market should not be overly enthusiastic about an imminent rate cut.
Related Reading
This week’s focus is on the Federal Open Market Committee (FOMC) meeting and its updated bullet point structure. In March, the dot plot showed a possible rate cut of 2-3 times in 2024. However, a review of the June dot plot suggests a conservative outlook, showing only 1-2 cuts. Ted explained, “The March dot plot showed 2-3 rate cuts in 2024, but the June dot plot suggests only 1-2 cuts should be expected.”
This alignment between the Fed’s projections and market expectations likely gives the central bank greater flexibility in future communications about interest rates. For Bitcoin, maintaining the support level of $66,000 is important.
Ted emphasized the importance of this threshold, saying, “It is important that Bitcoin maintains its support at $66,000. If it is broken, sellers can take a strong position in the market and force an immediate exit from the bulls. ” This support level is seen as an important threshold, with potential implications for broader market sentiment.
The implied weekly range of Bitcoin and Ethereum shows cautious optimism among traders. Bitcoin is expected to trade between $65,100 and $74,100, while Ethereum is expected to fluctuate between $3,388 and $4,025. Ted emphasized, “This week is critical for BTC’s (and by extension, the broader crypto market) short-term upside.”
Related Reading
Ted also highlighted the performance of US tech stocks, particularly the NASDAQ, which recently hit all-time highs. “US tech stocks are feeling volatile, as the NASDAQ starts to rise regularly in anticipation of upcoming central bank policy,” he said. This breakout shows that there is something in store for Bitcoin.
Ethereum’s performance relative to Bitcoin is another area of focus. Ted suggested that Ethereum could start “playing catch up vs Bitcoin,” especially with the expected launch of Ethereum ETFs on Wall Street. This ability of Ethereum to close the performance gap with Bitcoin has the potential to be monitored in the coming days.
Additionally, rate decisions from the Swiss National Bank (SNB) and the Reserve Bank of Australia (RBA) are on the radar. While no rate cut is expected from these central banks, their decisions will be scrutinized for any indication of a change in monetary policy in the future. Ted said, “It is not expected that the Central banks of Australia or Switzerland will cut rates at this week’s meeting, but will remain on hold.”
ETF flows, which slowed last week due to market turmoil ahead of major events, are also expected to play an important role. Ted commented, “Last week we saw a bit of ETF movement on Wall Street for Bitcoin. Probably due to the jitters before the important events, it will be the key to BTC’s strength coming back next week. “Strong ETF flows are critical to maintaining liquidity and supporting Bitcoin’s price.
In conclusion, this week is set to be an important one for Bitcoin and the broader crypto market. The interplay of disinflation trends, Federal Reserve communications, key support levels, and external economic factors will shape market direction. Ted concluded, “The data clearly points to a shift in housing monetary policy—and that may be sooner rather than later. This reinforces my view that dips are buying opportunities in risky assets like cryptocurrencies and stocks. “
At press time, BTC traded at $65,965.
The featured image was created with DALL·E, a chart from TradingView.com
Source link
