- Overnight, US inflation metrics locked in four consecutive months of declining inflation.
- Bitcoin and Ethereum ETF Flows continue to remain steady.
- Altcoins analysis: SOL and ETH
After the storm of events last week, this week has potentially brought more of a cautious tone to the market, with Bitcoin currently trading only +0.22% higher since the weekly open at 10 am AEST on Monday.
Fear and greed currently reads 52.
Bitcoin and Ethereum ETF Flows Remain Buy-Side Bias.
This week so far has netted more buying than selling across all Bitcoin products collectively and Ethereum, however the results are far below their all-time averages.
The Grayscale Ethereum product has notably reduced the selling pressure on the market, which had sold $1.6 billion USD over the first three days of the ETFs going live. Contrast that with the last three days which have seen $47.9 million USD net outflows.
Inflation Deceleration
For the fourth consecutive month, year-on-year inflation in the US has declined, with a 2.9% actual reading landing last night when the market expected 3.0%.
This is timely, as the next interest rate decision in the US is approaching on September 18th. Data points like this are critical for decision-makers, especially with rising worries that waiting too long with addressing labour market issues could jeopardise future economic growth.
Economic Calendar Events
We have US retail sales data on Thursday at 10:30 pm AEST, which may be more significant as concerns about consumer spending habits may change, with the unemployment rate increasing to 4.3% in the US at the start of this month.
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Bitcoin – BTC
After a sizeable move last week, Bitcoin started this week with lethargy. We also saw the market reject at the 200-day moving average (blue line).
Bullish Scenario
Over the coming days, bulls defending the current range lows may be how we begin to trend higher. And prices moving back above the 200-day moving average (blue line).
Bearish Scenario
Lack of interest here or seller control could result in further decline. We may see prices back towards the June low or lower.
My Thoughts
This has been quite a big news week on the economic calendar, I believe we start to see the narrative shift away from inflation and the market become more responsive to employment and growth data like retail sales tonight.
In my opinion, the market is expecting rate cuts in mid-September, and I would expect the market to start pricing that in now.
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Ethereum – ETH
A new record was set for Ethereum liquidations with over +$300 million USD ripped on futures exchanges. Currently, it trades outside the range of the multi-month consolidation. Below are my takes on what could happen next.
Bullish Scenario
Prices accepting and moving back inside this range, above $2,800 would be bullish for me. From there, we could then look to see if prices are trending towards the range midpoint, and range-high.
Bearish Scenario
A bearish retest at this channel low of $2,800 may be an ideal spot for bears to begin operations and we could see prices break $2,100.
Solana – SOL
Next up is Solana, which has shown more strength than Ethereum relative to where it trades as it’s back inside its multi-month trading range.
Bullish Scenario
Continued support at these recent lows, and moving above the midpoint of this multi-month trading range.
Bearish Scenario
Failure to find interest at these prices could result in prices returning back towards the recent dip.
My Thoughts
Looking at all the charts today, one thing is a common theme, all charts are trading and rejecting at their 200-day moving average.
While this stat alone isn’t enough in my opinion to signal any action, it does provide the insights that the market as a whole is at a decision point.
I wouldn’t be surprised if some time is needed for momentum to build to create a sustained trend (up or down) in the market. One way to visualise that, is for the 200-day moving average, to become support.
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