Experts of the ASTL investment project analyzed the situation on the market and told how the dynamics of the first cryptocurrency will change in the coming days.
On September 18, bitcoin is trading at $20,000, over the past week the cryptocurrency has fallen in price by 7.4%. The specialists told why they expect the downward dynamics to continue in the coming week, and what factors may affect this.
"Buyers' positions have been hit hard," says Andjei Korotkewič, CEO of the ASTL project. The week from September 12 to 16 was not a good one for the cryptocurrency market. Bitcoin losses are 9.59%. The BTC/USDt pair fell to $19.4 thousand. Bitcoin collapsed on Tuesday, September 13, after the publication of the inflation report for August in the United States. The consumer price index showed a higher value than the markets expected. Cryptocurrencies collapsed along with stocks amid the dollar rally. As a result of the day, the Nasdaq index fell by 5.16%, S & P500 - by 4.32%.
69 hours have passed since the release of American statistics, and crypto investors still cannot recover, drifting around the level of $20 thousand per bitcoin. Now the focus has shifted to the US Federal Reserve meeting on September 21st. After the inflation data, investors began to consider a 100 bp rate hike. According to the CME, the probability of such an increase is 24% versus 0% a month ago, by 75 bp. - 76%. Interestingly, the likelihood of a 100 bp rate hike. or up to 4% at the November 2 meeting is 57%. Hence the nervousness in all markets.
Now buyers have really suffered a lot and are trying to keep the level of $19.5 thousand per bitcoin, but their strength is running out. Bitcoin is closely related to the stock market, so its direction will be determined by the dynamics of stock indices. According to technical analysis, the value of the S&P 500 index broke through the trend line at around 3925 points. The bitcoin exchange rate fell below the $20.5 thousand level, which previously acted as resistance.
If the fall of the indices continues on the technical factor, then the risks of returning to the level of $18,000 will increase. Futures are falling at the end of the week, leaving no chance for buyers to recover. If at the end of the day the S&P500 index closes with a fall of more than 1%, then at the weekend there are risks of seeing straits of 10% on the cryptocurrency market.
In seasonal cycles since 1940, the S&P500 index is expected to turn up and move upwards through the end of the year from early October. In this regard, the upcoming meeting of the US Federal Reserve, which will be held on September 21, will be a decisive event for the stock and cryptocurrency markets. If the stock indexes do not sink much, then it is likely to see a new rally in October.
“The annual minimum for bitcoin will be updated,” says Konstantinas Sizovas, CFO of the ASTL project, “Next week, we expect mainly a continuation of the downward trend in crypto assets. Now the attention of crypto market participants is focused on the FOMC meeting and the announcement of data on the rate in the United States, which will take place on Wednesday, September 21. A rate increase of 75 bp is already included in the price, but in the event of a "surprise" and a rate increase immediately by 1% (the probability of which is now estimated at 38%), at the moment of price on the stock and cryptocurrency markets will come under pressure amid sales."
The nearest targets for the movement of the main crypto assets are $17.5 thousand for BTC and $1.23 thousand for Ethereum. Buying interest at these levels is high and any significant market decline will be actively bought out by players. The annual low for bitcoin is highly likely to be updated, however, I expect that by the end of the coming weeks, the market will generally remain at current levels and continue to create conditions for the formation of a bottom.
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