14.09.202207:10 Forex-elemzések és áttekintések: BTC tumbles post-US inflation

Yesterday, we suggested that bitcoin was about to fall. It turned out to be true, and the digital asset went down already in the middle of the day. Of course, a $2,200 plunge is not significant for the flagship cryptocurrency. The coin is still moving in a sideways channel between $18,500 and $24,350. Therefore, it is too early to say that the trend has resumed. Moreover, jitters were felt across markets yesterday, and they posted significant losses. Nevertheless, bitcoin is still moving below the descending trendline towards the lower limit of the sideways channel. Thus, we may assume that the price will test this mark, rebound four times, and break through it. If our assumptions are accurate, the downtrend will resume, and bitcoin will nosedive to $12,426.

Yesterday, all eyes were on the US inflation report, which is now as important as the Federal Reserve's meeting. This is because all the regulator's further decisions on interest rates will be based on inflation results. The figures that came yesterday can be called neither disturbing nor shocking. If inflation accelerated, that would be shocking, whereas if it plunged by over 1%, this would cause turbulence in the market. However, annual inflation actually decreased by 0.2% in August, beating market expectations of a 0.2% rise. That is, nothing extraordinary happened. Still, demand for the dollar mounted yesterday, while risk appetite declined. It is clear why markets rushed to buy out the greenback: the pace of a slowdown in inflation decreased. Therefore, the hawkish Federal Reserve is likely to raise interest rates by 75 basis points at a meeting next week. It is commonly known that bitcoin, the stock market, and risk assets are usually bearish when the US central bank makes hawkish decisions on interest rates. In other words, markets started to price in the future rate decision yesterday. In this light, BTC could extend its fall, and a lot will now depend on the barriers of $18,500 and $17582.

In the 24-hour time frame, the quote failed to break through $24,350 and $18,500 (Fibonacci retracement of 127.2%). Generally speaking, bitcoin is likely to trade in the sideways channel, and it remains to be seen for how long. Therefore, it would be wiser to wait for the price to leave the channel and then trade BTC. Should a breakout through $18,500 occur, the quote will head towards $12,426. Signals indicating a rebound from the trendline or upper/lower limit of the channel can be used as well.