Schlagwort: blockchain analysis

• Bitcoin consolidates ahead of key US dollar data
• All eyes are on the Federal Reserve
• January jobs report to offer more clues about a possible recession in the United States

Bitcoin hovers around $23k after rallying in January. It currently consolidates, mostly because investors await news from the United States economy. 

Today is the month’s last trading day, but the trading week is still young. Starting with tomorrow, three major economic events may move Bitcoin and, with  it, the entire cryptocurrency market: 

• Federal Reserve’s decision
• Non-Farm Payrolls
• Average Hourly Earnings

Federal Reserve’s monetary policy decision

This is a big week for the US dollar, thus, a big week for Bitcoin too. On Wednesday, the Federal Reserve of the United States presents its monetary policy decision, which keeps markets in tight ranges. 

No one wants to take a bet ahead of such an important economic event, even though the market seems to expect a 25bp rate hike. But it is more about nuances and the message that the Fed sends rather than what it actually does. 

Therefore, the press conference following the FOMC Statement is more important for financial markets than the actual interest rate decision. 

Non-Farm Payrolls

Two days later, the Non-Farm Payrolls data for January will be published. The degree of the upcoming recession in the United States is still unclear, or if there will be one. In any case, the jobs data will make it clear what to expect in the months ahead from the largest economy in the world. 

Average Hourly Earnings

Inflation may have peaked, but do not expect to ease rapidly. Yesterday’s data from Europe showed renewed upside pressures, and one should not be surprised to see something similar in the United States

Together with the jobs data, the Average Hourly Earnings (AHE) will shed light on the trend for US wages. Upside pressures should translate into higher inflation in the months ahead, thus potentially moving the dollar and the overall financial markets.

The post 3 events to move the cryptocurrency market by Friday appeared first on CoinJournal.

• Ripple gained over 16% YTD
• While the momentum is positive, it has yet to overcome resistance
• $0.3 – $0.5 are pivotal levels for XRP/USD

This is the first important trading week of the year as three central banks (Federal Reserve, European Central Bank, and Bank of England) prepare to release their monetary policy decisions. Out of the three, the Fed’s decision is critical, as it affects the US economy and has indirect effects worldwide.

The consensus is that the Fed will increase the funds rate by 25bp this time. The risk is that it will be more aggressive – either by hiking 50bp or by delivering a hawkish message. Because markets are forward-looking, the impact of what the Fed does/says will be on the spot.

For the cryptocurrency market, the US dollar’s direction has mattered a lot lately. As the greenback weakened at the start of the trading year against its peers, it also lost ground against leading cryptocurrencies.

Take Ripple, for example. It gained +16.21% YTD, much of it on behalf of the dollar’s weakness.

What does technical analysis say about where the price might go next?

XRPUSD chart by TradingView

Ripple remains bearish while below resistance

Ripple followed Bitcoin in January and bounced from the lows. However, the bias remains bearish unless it can climb above resistance.

Three things support the bearish case.

First, the price action for the past several months is bearish, in the sense that it remained below resistance, despite the recent recovery in cryptocurrency assets.

Second, the horizontal support around $0.3 looms large. A break there puts a descending triangle in focus, and technical traders will hunt the measured move pointing to much lower levels.

Finally, since its inception, Ripple has only made a series of lower highs. No matter what the fundamentals showed, Ripple wasn’t able to climb above the previous lower high. This is bearish from a technical standpoint and deserves more attention from crypto bulls as it may signal more downside down the road.

Both for Ripple and the other leading cryptocurrencies.

The post Ripple price prediction ahead of the Fed meeting appeared first on CoinJournal.

• Leading cryptocurrencies started 2023 with positive momentum
• Bitcoin, Doge, Ripple, and Ethereum move in a direct correlation
• Ethereum has more room to rally

The cryptocurrency market started  2023 with positive momentum. As a result, all leading cryptocurrencies gained against the US dollar, and the so-called “crypto winter” from 2022 vanished.

Bitcoin is clearly the leader. It bounced strongly from the 2022 lows after losing about -65% of its value. The direct correlation between Bitcoin and the rest of the cryptocurrency market is well known, but something interesting has happened since the start of 2022.

More precisely, the correlation weakened. Sure enough, other cryptocurrencies follow when Bitcoin enters a bullish or bearish market. Only this time, the extent is different.

ETHUSD chart by TradingView

Ethereum lags behind

The chart above shows the four leading cryptocurrencies and how they performed against the US dollar – Bitcoin, Doge, Ripple, and Ethereum. The correlation is obvious, but Ethereum lags.

In 2022, Ethereum fell by the most. It lost over -70% of its value before the recent rally.

While it did rally in 2023, following Bitcoin’s lead, it lags behind. More precisely, while Bitcoin, Doge, and Ripple moved more or less in a synchronized fashion, Ethereum bulls fell behind.

The recent rally reduced the cryptocurrencies’ losses against the US dollar, but not to the same extent. For instance, BTC/USD is now -49.86% lower than it was in January 2022. However, ETH/USD did not recover as much, and it is down -57.85% over the same period.

In other words, if one believes that the US dollar’s weakness continues, then it might be appropriate to bet on Ethereum’s rallying more than Bitcoin, Doge, or Ripple.

On Wednesday, the Federal Reserve of the United States is about to announce its interest rate decision for the first time in 2023. A press conference will follow the announcement, and the US dollar’s volatility will reach extreme levels.

The post Should you buy Ethereum amid lagging behind Bitcoin in 2023? appeared first on CoinJournal.

• The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar
• Bitcoin might give up some of its 2023 gains on a hawkish Fed
• All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening

The Federal Reserve’s monetary policy decision is scheduled this week. It is the first time the FOMC (Federal Open Market Committee) meets in 2023, and the stakes are high for the US dollar.

Bitcoin has strengthened against the US dollar in January so far, in sync with other fiat currencies. Therefore, whatever the Fed decides on Wednesday will affect Bitcoin price too.

A hawkish Fed may turn up being bearish for Bitcoin. These are the four areas where the Fed may express its hawkishness: inflation outlook, growth outlook, interest rates level, and quantitative tightening.

Inflation outlook

The Fed is committed to bringing inflation to its 2% target. This is why it has raised rates so aggressively, so if the Fed says that inflation is embedded and upside risks remain, then the US dollar should move higher.

In this scenario, the market will bet that the Fed sees ongoing rate hikes as appropriate.

Growth outlook

The currency stance is that a sustained period of below-trend growth is likely. If the Fed changed its view and sees recession required to have a material impact on the inflation outlook, that would also trigger a sharp move higher in the dollar.

Interest rates

Ultimately, it is all about the interest rate level. The funds rate range has reached 4.25%-4.50%, and all eyes are on what the Fed does and says on Wednesday.

The base case scenario is that the Fed will hike by 25bp and says that ongoing interest rate increases are appropriate. Therefore, anything more than that should be bullish for the dollar and bearish for Bitcoin.

For example, the Fed might hike 50bp. This is a risk going into the meeting, especially considering that inflation is not backing down as fast as initially thought.

Quantitative tightening

The Fed currently shrinks the balance sheet at a pace of $95 billion/month. A decision to accelerate the balance sheet reduction would be very hawkish for the dollar.

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

• Katie Stockton expects a pullback in Bitcoin price ahead.
• She explained her “neutral” view on CNBC’s “Squawk Box”.
• Bitcoin has climbed roughly 40% since the start of 2023.

Bitcoin has now surpassed the key $23,000 level but Katie Stockton of Fairlead Strategies continues to recommend caution as the recent rally could reverse just as easily.

Stockton defends her stance on CNBC

Year-to-date, the first ever decentralised cryptocurrency has gained about 40% – a strength she says is an opportunity for investors to pull out.

Reiterating her “neutral” stance on Bitcoin, Stockton said this week on CNBC’s “Squawk Box”:

When you see such strong, steep rallies, they’re more characteristic of countertrend moves. At one point, we had 14 consecutive up days this month for BTC. So, we’re sceptical to its sustainability and see it as countertrend.

The upcoming week is a crucial one for Bitcoin because of the Fed’s announcement. The CME FedWatch Tool currently signals a more than 98% probability of a 25 basis points hike this time.

Bitcoin has broken above its 200-day MA

Also on Sunday, a top trader and analyst, Peter Brandt warned of a near-term pullback in BTC. Others, including Michael van de Poppe and Credible Crypto have a similar opinion as well.

Interestingly, Bitcoin is now trading meaningfully above its 200-day Moving Average. Still, Katie Stockton said:

This has happened before and it proved to be a false breakout. So, we’re not convinced we have a breakout here. But it’s an incremental positive. We hope this manifests in our longer-term indicators which still very much point lower.

She’s not particularly constructive either on the benchmark S&P index that’s up more than 6.0% for the year at writing.

The post Pro: the recent rally in Bitcoin may not be ‘sustainable’ appeared first on CoinJournal.