Today, I would like to address a hot topic, with a view to approaching the announcement of the Fed’s monetary policy decision. But first, let’s look what happens to Bitcoin and the crypto market as a whole.
Crypto Market Overview
Bitcoin remains directionless, with many mixed indicators that do not provide a clear scenario for the price action. Altcoins show short-term rally behavior, though it is too early to judge whether price growth will be sustainable.
BTC’s failure to break the $ 10,400 resistance actually made the bulls powerless. So now the control seems to be in the hands of the sellers. However, the price has miraculously sustained above the vital level of $ 10,000.
Over the past 24 hours, Bitcoin has recorded an exchange trading volume of $ 15 billion, according to CoinMarketCap’s data. Its market capitalization is $ 184 billion at the time of my writing. This represents 67.9% market dominance, a significant drop from the peaks above 71% observed a week ago.
Can Low US Interest Rates Affect Bitcoin?
And let’s get to the point… President Trump has repeatedly called for more significant economic stimulus. And the US Federal Reserve has cut interest rates this year from 2.5% to 2.25%. But the US dollar is still on the rise against the euro, and the eurozone is already implementing a policy of negative interest rates.
Now you might ask – what does this have to do with the crypto market? A high dollar exchange rate can hurt US exports while encouraging other economies to produce and export their more competitive goods. But a weakening dollar can drive some of the money into crypto currencies.
US-based investors were one of the main drivers of the Bitcoin (BTC) market during peak trading in 2017. But the hysteria soon dissipated, leaving investors much more cautious. Now, most of the price action for BTC is concentrated on exchanges that manage to attract Chinese traders.
The assumption that interest rates can contribute to the success of BTC has already been made in the market and BTC supporters may become enthused if the Fed responds with a series of interest cuts.
Bitcoin technical analysis
On the four-hour chart, the price of BTC/USD shows that it is caught in a tight range between 10 578.4 and 9 901.3.
This is obviously untypical for Bitcoin, which is usually quite volatile. Even worse, in the last 6 trading days, the trade remained in the range of less than $ 300.
On the upside, we need a clear break above the top of the range at 10 578 to see testing of $ 11,000. However, if buyers are unable to protect the 10,000 level, Bitcoin is likely to dip to the next important support around $ 9,000. This area has already been multiple proven to be a strong level of support over the past few months and has continued to push for buying pressure.
Ethereum outrun Bitcoin
And while BTC is trading without direction, the recent behavior of ETH is seen as a potential signal for the upcoming Altcoins rally. However, the altcoins remain highly volatile.
Ethereum’s price is trading above the 50-day SMA on the 4-hour chart, which is currently located at $ 186.60. At the same time, the 100-day SMA is around $ 181. The gap between the two moving averages on the 4H chart continues to increase, which can be interpreted as a signal to improve the bullish picture. Ethereum buyers are looking forward to raising the price over $ 220. A clear break above that level should open the way for a correction towards $ 240 and $ 300 resistance targets.
Author: Silviya Velcheva
* The views expressed in this material do not constitute a recommendation or advice for the purchase or sale of cryptocurrencies in the digital assets market or other financial instruments. The predicted forecasts meet the expectations of the author of the material and may not materialize. Trading in currencies, contracts for differences on margin or cryptocurrencies poses a high risk and may not be suitable for all investors. Past results are not a guarantee of future success.