Fundamental Overview
The strong US NFP report last Friday triggered some defensive positioning in Bitcoin as we head into the US CPI and FOMC decision tomorrow. In the big picture, the data didn’t change much but it added a bit of uncertainty into the market which is now waiting for the US CPI to clear it out.
In case the US CPI comes out soft, then we can expect Bitcoin getting a boost and possibly breaking to new highs. Conversely, a hot report will likely trigger another selloff and take us back to the 60K support zone.
Bitcoin Technical Analysis – Daily Timeframe
On the daily chart, we can see that Bitcoin couldn’t extend above the 72000 resistance and eventually dropped back into the 67275 support following the US NFP release. This is where we can expect the buyers to step in with a defined risk below the support to position for a break above the resistance with a better risk to reward setup. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 60000 support zone.
Bitcoin Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price recently broke below the trendline which is generally a sign of weakening momentum. This has turned the bias a bit more bearish in the short-term although we will likely need a decisive break below the 67275 support to strengthen the bearish momentum. For now, the price will likely keep ranging between the 67275 support and the 72000 resistance.
Bitcoin Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price is trading right at the support zone and it’s also around the lower limit of the average daily range. This might be a good dip buying opportunity for the buyers as the price is unlikely to extend further without a strong catalyst.
The first target should be the downward trendline where we can also find the 61.8% Fibonacci retracement level for confluence. A break above the trendline should see the buyers increasing the bullish bets into the resistance. The sellers, on the other hand, will likely lean on the trendline to position for a break below the support with a better risk to reward setup.
Upcoming Catalysts
This week is a bit empty on the data front although we will have the biggest market moving events tomorrow when we get the US CPI data and the FOMC rate decision. On Thursday, we have the US PPI and the latest US Jobless Claims figures. On Friday, we conclude the week with the University of Michigan Consumer Sentiment survey.
