This first week of September saw Bitcoin trade and consolidate below the $ 20,000 level as the bearish trend continued, fuelled by the lingering effect of J. Powell symposium speech, strong US job market data despite monetary tightening and a strengthening US dollar, reaching multi decade high vs the euro with the energy crisis unfolding in Europe.
As seen last week, Bitcoin’s co-dependence with tech assets continues to prove true, hampering its ability to move higher against a background of macro headwinds and the appreciation of the US dollar driving the price of energy higher.
As of ETH, the anticipation of the merge is driving the price up towards last month’s levels.
This week, markets are expecting the ECB to strengthen its monetary policy and continue on the rate hike it started last July as Eurozone inflation hit a new record high in August of 9.1%, boosted by rising energy and food costs. J. Powell speech on Thursday could also drive the market sentiment.
Client Profits
In the absence of overall direction, we maintained our portfolio position breakdown around 35% exposure to the market.
We took profit on an alt coin trade – LINK, realizing a 15% trade return.
We still hold little risk exposure to BTC and a few large-cap coins. We don’t plan to exit our existing positions for now.
In the short term, we don’t think the upsloping support of our parallel channel acting as resistance around the $23,000 levels will be broken in the near future.
BTC
BTC/USD is down 2.2% in September 2022 and broke below 2017 highs today, prolonging its retracement further and is now trading in a narrow range around $19,750 as investors started to take fewer risks after Federal Reserve Chair J Powell reiterated the Fed’s commitment to keep raising rates to fight against inflation.
We could see price action stay below the $20,000 level that acted as a support in recent months and consolidate around the $19,500 level with long-term support in the $17,500 area – the next support would be 12K/13K.
ETH
After testing the $ 1450 support this past week, ETH consolidated and found some upside reaching back to the $1650 levels as the bullish sentiment from the merge due in the coming weeks is prevailing. The consolidation period provided a nice support for the price action to try to reach back to last month levels in the $1950s.
We believe ETH could continue on this bullish trend in the short term reaching back up to $1,950 levels, but the stock market should make a nice move to the upside or at least the bearish pressure peter out to continue to fuel the upward trend
Other markets:
Nasdaq and S&P,
kept retracing this week as stronger-than-expected reading on ISM services sector activity fed into expectations that the Fed will keep raising interest rates to fight inflation further. This adds up to favourable job data readings from last Friday.
Nasdaq and S&P 500 were both extending the tumble and still trading below their 50D SMA – 12841 and 4093, respectively.
DXY,
followed on from its last week positive close and was trading close to record levels on Tuesday above 110. Catalysts remain the same with the Fed tightening its monetary policy and EURUSD back at parity as the energy crisis is progressively unfolding in Europe – geopolitical risk and energy shortage.
Thank you!
CFT Team