The collapse of FTT has caused a selloff in Bitcoin, leading to a loss of confidence in the space. The asset has not seen major liquidations and even though it set a new low, this isn’t a major capitulation for the crypto space.
US CPI data will be released today and is forecasted to come out at 8%. If the data comes out higher than expected, we can expect the Dollar to slide to the $109.5 level. In that case, it shows that the recent contractions by the Fed have not been as effective as expected and we should see a bullish dollar to the $112-$114 range.
The Dollar sentiment is the main market mover for assets at the moment and CPI data has been at the steering wheel this year, deciding the direction of price action. We can expect increased volatility during the anticipation and at the release.
In today’s DIFX Analytics, we’re going to look into the following assets:
Bitcoin set a new low at $15,632
Bitcoin has set a new low at $15,632. The rapidly spreading contagion effect from the FTT crash has led to torrential price action in the crypto space including a major selloff in Bitcoin.
At the moment, FTX is under investigation by the SEC and CTFC over the management of clients’ funds. The market has to wait for any further announcements regarding the fate of the token. In the meantime, traders should make sure they’re applying proper risk management techniques.
The dollar is traded within the trend
The Dollar index has rejected $109.5. It experienced a bull run up to $110.5 and is now trading around $110.
RSI is gaining momentum but has failed to set a new low on the most recent swing low. We have CPI data coming out later today which will move prices.
Inflation data releases are the most watched indicator that reflects the overall results of interest rate hikes. We can expect strong inflation data to be bearish for the dollar and vice versa.
Gold has broken $1700
Gold is in the process of delivering a reversal confirmation to the upside. We have seen a triple bottom at $1617.
Price action has broken the 50-day EMA to the upside and is hovering close to the first Fibonacci retracement level. Price action touched $1722 at Fib level 1 but is now consolidating around this area.
Gold has found strength here and has not rejected this key resistance with any aggression. We may see Gold break into the $1724 – $1788 range soon.
Pound Sterling declines
GBP/USD has broken the upside trend and price action is trading at $1.1396. The recent bulls in the Dollar have been reflected in a slide in GBP.
RSI is weaker and dropped below 50. We may see calm market activity as the anticipation trade up until CPI data is released.
If the inflation data comes out weaker than 8%, then this would signal that the Fed needs to contract the economy with a more hawkish policy.
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DIFX shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee, or implication by DIFX that the forecast information will eventuate, that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses in particular if the conditions or assumptions used for the forecast or mentioned in the analysis do not eventuate as anticipated and the forecast is not realized.