- US Inflation data lands under expectations, markets respond green.
- Bitcoin technical update – where to next?
- Altcoin analysis: PEPE, AGIX
And there we have it! Bitcoin finished yesterday’s trading with a $4,700 USD candle, taking prices just shy of $67,000 USD.
What caused this outrageous upside? In my opinion, underlying conditions in the global economy are improving – let’s break this down.
US Inflation reads lower in overnight data.
Recently, a big negative sentiment driver has been the fear that inflation is back. Data has shown higher-than-expected figures for the last few months. But, for the first time in the last three months, the US Consumer Price Index (CPI) has fallen, with a 0.3% result.
Lowering inflation leads to a higher chance of lower interest rates
Jerome Powell, US Federal Reserve Chair, has not committed to specific timing for rate cuts. Still, analysts have a growing consensus that the Federal Reserve will begin reducing rates as inflationary pressures ease in 2024.
We’ve now seen overnight, with the above data point, that inflation is dropping and not steepening higher.
Europe has already shown their hand, commenting that interest rates will fall in the coming months.
Lowering interest rates means more cash and credit
Michael Howell, CEO of CrossBorder Capital, describes how lower interest rates and inflation enable more liquidity to flow into the economy.
CrossBorder Capital has highlighted the crucial role of liquidity in modern financial systems, emphasising that lowering inflation and interest rates will likely increase credit and cash within the system.
This is a positive fundamental and sentimental shift for growth asset classes, like digital assets.
Related: Cooling US Inflation Sparks Rate Cut Hopes, Triggers $110M Crypto Short Liquidations, and Fuels Market Rally
Bitcoin – BTC
Since my last update, Bitcoin has continued to defend the lower regions of this trading range, with volatile movement higher overnight. In my opinion, the work is still not over for the bulls. Below are potential scenarios using range analysis.
Bullish scenario
Price consolidates at the midrange and moves towards the range high of $74,000 USD. From here, we can start to look at new all-time highs.
Bearish scenario
Bitcoin is unable to sustain this rally and find interested bulls. This could result in a retest of the range low at $60,000 USD. A break outside this range low would not look good for the bulls.
PEPE – PEPE
Interestingly, throughout this consolidation period for Bitcoin this week, PEPE has been one of the most bullish-looking charts out there. We’ve now seen new all-time highs overnight. However, it’s at a very interesting technical point looking at range structure.
Bullish scenario
A move back above the Range highs here would be a bullish move that could result in price discovery. However, another bullish scenario might be a pullback towards the mid-range before it can push to new highs.
Bearish scenario
Rejection at range highs may see prices fall back as far as the range low or even lower should there be a systemic weakness in the market. For example, if Bitcoin falls below $60,000 USD.
Related: VanEck Memecoin Index Soars Over 160% YTD as Solana Memecoin Frenzy Roars On
Singularity NET – AGIX
AI sector tokens continue to show strength, leading the charge amongst altcoins as Bitcoin showed its strength overnight, AGIX was amongst those top performers at the time. Below is some analysis using Fibonacci extensions from the current right high and low.
Bullish scenario
A price rally above and holding the Golden 0.618 Fib Ratio – $1.134 will be a big victory for bulls. We could then see a return to previous highs and potential new highs of $1.691 and then $1.986.
Bearish scenario
Failure to see strength here may result in new lows, under $0.607.
See you all again next week.
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