Fundamental Overview
The soft NFP report on Friday weighed on the risk sentiment as growth expectations took a hit. Bitcoin fell to new lows before erasing most of the losses as Fed’s Williams said over the weekend that he would go into the September meeting with “very much an open mind”.
Overall, the data wasn’t as bad as one might think by just looking at the reaction in the markets but given that we were positioned for a strong report, it might have caught people by surprise. The market is now pricing 58 bps of easing by year-end for the Fed compared to just 35 bps before the NFP release.
Higher chances of easing and lower inflation figures from the ISM Manufacturing and UMich reports, should be supportive for risk assets and Bitcoin going forward. We have the ISM Services PMI and the Jobless Claims data this week.
A combination of lower inflation in the ISM and good jobless claims figures might give further boost to Bitcoin to push into new highs as the market will start to look forward to Fed Chair Powell opening the door for a cut in September at the Jackson Hole Symposium.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin eventually pulled all the way back to the major trendline around the 112,000 level. The buyers stepped in around those levels with a defined risk below the trendline to position for a rally into a new all-time high. The sellers, on the other hand, will want to see the price breaking lower to open the door for a deeper correction into the 100,000 level next.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong resistance zone now around the 116,000 level where we can also find a downward trendline for confluence. Those will be the levels where we can expect the sellers to lean onto to position for a break below the major upward trendline. The buyers, on the other hand, will look for a break higher to increase the bullish bets into a new all-time high.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as we don’t have strong levels where to lean onto. Nonetheless, we have a minor support around the 114,000 level that could keep the downside limited. Conversely, if the price were to break lower, we could see another flush into the major trendline where the dip-buyers will likely re-emerge. The red lines define the average daily range for today.
Upcoming Catalysts
Tomorrow we have the US ISM Services PMI and on Thursday, we get the latest US Jobless Claims figures.
