- Arguably, the most critical economic announcement of the year came this morning concerning the future of interest rates in the US, sparking a market-wide rally following the announcement.
- BlackRock continues to push forward with real-world tokenisation of assets.
- Altcoin analysis for ARB and XAI – Two assets with fundamentally positive impacts from the recent Ethereum Network ‘Dencun’ upgrade.
In the past week, the market trend for digital assets has predominantly been towards selling. On Bitcoin, we witnessed a roughly 17% decrease in value from the highs, back towards $60,000 USD.
This shift could be attributed to anticipation of significant economic news out of the US, as investors adjusted positions to account for any potential negative developments. Specifically, they were preparing for economic forecasts for 2024 and decisions on US interest rates.
However, following the US Federal Open Market Committee’s announcement, which indicated no change in the cash rate, Bitcoin saw a surge in value where it now trades at $67,700 USD.
Related: Pomp Says ‘This Time Is Different’ as Prices Bounce Back
Interest Rate Uncertainty Lifts
From this news event there is quite a bit to unpack, but the short and sweet of it all is that we’re back to previous expectations set in December 2023. Below are my takeaways.
- GDP forecasts are now more positive than before.
- Unemployment rates are as expected, showing a stable job market.
- Inflation, as measured by the PCE index, is predicted to drop slightly to 2.4% from a previous 2.8% estimate.
- Cash rate predictions for 2024 are on track for reductions.
You can read these documents and press releases here.
Why Does This All Matter? – Impact on Market Sentiment
Steady cash rates in the US and unchanged future projections boost market confidence. This stability leads to more accurate economic forecasts and planning, making investors and businesses more optimistic. Consequently, we might see more activity in financial markets, including digital assets, as people anticipate lower cash rates ahead.
BlackRock Continues Push Towards Tokenisation
Despite some of the potential fear across the market in the recent days of selling, BlackRock CEO Larry Fink announced on Wednesday that BlackRock has launched a new fund on the Ethereum network, marking its entry into the asset tokenisation space.
The Fund is represented by BUIDL tokens, backed by cash, U.S. Treasury bills, and repurchase agreements, and aims to pay out yields daily through blockchain technology. This is big.
Bitcoin – BTC
After a sudden selling period over the last few days, the market has shown a positive reaction after the key news release I mentioned above.
The previous Range Low, as shown below, has been reclaimed. Additionally, market participants have respected the 200-period moving average on a four-hour chart. Both traders and investors commonly use this indicator to assess the health of a trend. If this upward trend continues, these are all certainly positive early signs of health in my opinion.
For a further breakdown, check out my latest video on Crypto with Pav—plenty of Altcoin analysis as well as explaining my interpretation of underlying market conditions.
Bullish scenario
Price continues to move higher towards the middle of the Range identified above. Ideally, a new higher high above $68,950 USD can develop into an uptrend if a higher low is seen next.
Bearish scenario
During the remainder of the week, Bitcoin reverses back under the Range Low of $64,500 USD. This may resume the most recent downtrend.
Arbitrum – ARB
After the Ethereum network ‘Dencun’ upgrade earlier this week, assets like Arbitrum, which would benefit from this upgrade fundamentally, are also sitting in key technical areas.
Using a Fibonacci Extension, we can measure areas of interest from the current range high and low.
Bullish scenario
The ideal scenario for a positive market outlook, using Fibonacci levels, is that the price rises above the ‘golden-fib’ level of $2.05 (representing the 0.618 ratio).
Following this, according to Fibonacci extensions, the next significant levels are $1.69 (at the 1.272 extension) and $3.03 (at the 1.618 extension).
Bearish scenario
Failure to reach or hold above the ‘golden-fib’ level of $2.05 (0.618 ratio) could result in a further markdown. Making new lows.
Related: CoinGecko Report Highlights Growth of Real-World Assets in Crypto
Xai – XAI
On the topic of scalability, should this continue to be a narrative or theme to build momentum XAI fits the bill. It’s a Layer-3 scaling solution built on top of the Arbitrum network that serves to optimise blockchain gaming.
Their website claims that “..traditional gamers can own and trade valuable in-game items in their favourite games for the first time, without the need to interact with crypto-wallets.” You can visit their website to learn more.
Using a Fibonacci Extension, we can measure areas of interest from the current range high and low.
Bullish scenario
Like above, XAI’s price moving above the ‘golden-fib’ level of $1.39 (0.618). Then, it continues its uptrend towards the next key Fibonacci levels, at $1.81 (1.272 ratio) and $2.03 (1.618 ratio).
Bearish scenario
Failure to build this uptrend at any stage between now and reaching $1.39 (0.618). It’s possible for buyers not to sponsor higher prices and then for new lows to form if we move under $0.99 (the recent pivot low).
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See you all again next week.
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Stay informed and connected! I’m excited to announce my new YouTube channel, Crypto with Pav, where I dive into the latest trends in cryptocurrency, offering insights on what’s coming next and highlighting news and technical structure I believe is crucial.
I’m also on X.
Cheers!
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