InvestMacro

• Bitcoin could be rocked by Fed minutes & NFP
  

• Watch out for Mt. Gox developments
  

• Over past year NFP triggered moves of ↑ 2.3% & ↓ 1.9%
  

• Bearish channel breached but resistance at $63500
  

Thanks to the incoming US jobs report and developments concerning the failed Mt. Gox exchange, this could be a wild week for Bitcoin!

Despite prices rebounding from sub-$60k, sentiment remains fragile with a major liquidation event and uncertainty over US interest rates keeping bears in the game.

Looking at the technical picture, Bitcoin remains in a range on the weekly charts with potential resistance forming around $63500.

With all the above said, here are 4 things that could rock Bitcoin this week:

    1) FOMC minutes

The Fed minutes on Wednesday will be an appetizer before the main course on Friday.

Investors will be seeking insight into why Fed officials lowered their expectations for 2024 rate cuts despite growth and unemployment projections unchanged.

• Bitcoin may slip if the minutes sound more hawkish than expected.

• Should the minutes strike a dovish note, Bitcoin prices may edge higher.

Golden nugget: Over the past year, the Fed minutes have triggered upside moves of as much as 1.6% or declines of 1.3% in a 6-hour window post-release.

    2) Bankrupt Tokyo-based exchange Mt. Gox

From early July 2024, collapsed Tokyo-based bitcoin exchange, Mt. Gox is expected to start paying back users roughly $9 billion worth of stolen tokens.

Imagine losing 1 bitcoin worth roughly $500 back in 2014 and then receiving that same Bitcoin today worth around $60,000. What would you do?

There are expectations around the receivers of the stolen tokens cashing out, potentially triggering steep losses on Bitcoin.

    3) US jobs report

The incoming US jobs report is likely to influence bets around when the Fed cuts rates in H2.

Markets expect the US economy to have created 200k jobs in June, compared with the blockbuster 272k in the previous month while the unemployment rate is expected to remain unchanged at 4%.

It is worth keeping in mind that cryptocurrencies have shown sensitivity to interest rates due to their risky nature.

• A soft jobs report may push Bitcoin prices higher.

• If the jobs data exceeds market forecasts, this could drag Bitcoin prices lower.

Golden nugget: Over the past year, the US jobs report has triggered upside moves of as much as 2.3% or declines of 1.9% in a 6-hour window post-release.

    4) Technical forces

Prices have breached the daily bearish channel, but resistance can be found at $63500.

• Sustained weakness below $63500 may encourage a decline back towards $59000.

• A solid daily close above $63500 could open a path towards the 100-day SMA and 50-day SMA.

• Bitcoin ↓ over 8% on Monday

• Roughly 2% above $60,000 support

• Over past year US PCE triggered moves of ↑ 0.9% & ↓ 2.3%

• Key point of interest – $60,000

• Technical levels – $60,254.93, $57,5656.20 and $66,365.11

Bitcoin’s extended losses have set off alarm bells for bulls, with prices sinking below $60,000 for the first time since early May!

The world’s largest cryptocurrency collapsed over 8% on Monday thanks to cooling demand for Bitcoin ETFs and uncertainty over US interest rates. Developments revolving around the failed Mt. Gox exchange compounded the overall negativity, allowing sellers to dominate the scene.

Despite prices rebounding in the previous session, sentiment remains fragile with bears on standby to pounce again. In the near term, Bitcoin’s fate may be tied to Friday’s US PCE deflators.

The Fed’s preferred inflation gauge – the Core PCE has the potential to impact bets around when the central bank will cut rates in 2024. Any changes to these expectations may impact cryptocurrencies which have displayed sensitivity to interest rates.

Traders are currently pricing in a 70% probability of a 25-basis point cut in September with a move fully priced in by November.

Fun fact: Over the past year, the US PCE deflators have triggered upside moves of as much as 0.9% or declines of 2.3% in a 6-hour window post-release.

Taking a look at the technicals

With Bitcoins’ weekly price chart showing a potential double top, this PCE report could not be better timed to determine the cryptos’ next course of action- above or below the double top neckline.

Notice how volume declined into the second top of the pattern.

Bitcoin on the daily time frame may be in a potential symmetrical triangle, bouncing off the lower bound trendline (support) on yesterday’s price action.

Interestingly, this bounce off the support area of the symmetrical triangle coincides with an entry and exit out of the oversold zone of the RSI.  

The Relative Strength Index (RSI) is an indicator that highlights overbought and oversold zones.

Key levels to look out for in a decline include:

• $60,254.93 – The neckline area of the potential double-top pattern

• $57,5656.20 – The 200-day simple moving average (SMA)

• $56,457.70 – The lowest price between Bitcoins all time High ($73,711.39) and the most recent swing high ($69,498.98)

In a rally, the following levels are significant points of interest

• $66,365.11 – The 50-day simple moving average

• $71,428 – The upper bound trendline of the symmetrical pattern

• Bitcoin ↑ 14 month-to-date
  

• Could be rocked by US inflation data
  

• Over past year PCE triggered moves of ↑ 1% & ↓ 2.3%
  

• Technical levels –  $70,000 & $67,000
  

• Keep eye on Ethereum, Solana & Litecoin among others

The past few days have been volatile for the world’s largest cryptocurrency.

Bitcoin initially rallied above $70,000 last week due to market optimism around the prospect of spot Ethereum ETFs. However, prices crashed below $67,000 just hours before the SEC’s actual approval. Although bulls returned to the scene, upside gains were capped by fresh developments concerning the failed Mt. Gox exchange.

Still, Bitcoin could be in store for another wild ride this week thanks to the incoming US PCE inflation data.

All eyes will be on the Fed’s preferred inflation gauge – the core personal consumption expenditure index which could impact bets around when the Fed will cut interest rates.

As of writing, traders are currently pricing in a 74% probability of a 25 basis point Fed cut in November with a move fully priced in by December.

Note: In general, cryptocurrencies are indirectly affected by interest rates because of their high risk.

So essentially, high interest rates may sap appetite for riskier investments like crypto, and vice versa.

Fun fact: Over the past year, the US PCE report has sparked upside moves of as much as 1% or declines of 2.3% in a 6-hour window post-release.

Just like Bitcoin, here is how these other cryptos have reacted post-release…

Ethereum: ↑ 1% or ↓ 2%

Solana: ↑ 2.4 % or ↓ 2.8%

Ripple: ↑ 1.3 % or ↓ 2%

Dogecoin: ↑ 1.5 % or ↓ 2.7%

Litecoin: ↑ 3.6 % or ↓ 3.5%

Note: Past price movements do not guarantee future results but can be used to highlight how cryptos have reacted to the US PCE deflators.

Looking at the bigger picture, Bitcoin is up roughly 14% this month and still boasting year-to-date gains over 60%.

Prices remain trapped within a range on the weekly charts with support at $60,000 and resistance at $72,000.

Despite the choppiness on the daily charts, prices are still respecting a bullish channel with technical indicators signalling further upside. The candlesticks are trading above the 50, 100 and 200-day SMA while the MACD points above zero but bears seem to be eyeing $67,000.

• A solid breakout above $70,000 may open a path toward $72,000.

• Should prices slip below $67,000 this could open a path toward $65,000.

• Ripple waits on SEC response

• Crypto ↓ 12% year-to-date

• Rangebound on D1 timeframe

• Key levels of interest 0.5675, 0.5350 & 0.4750

• Breakout on the horizon?

Our focus falls on Ripple due to the legal drama with the US Securities and Exchange Commission (SEC).

This could be a big week for the crypto depending on how markets react to the SEC’s reply to the ongoing lawsuit.

But before we discuss how to take advantage of this opportunity, here are the basics:

What is Ripple?

Ripple is a money transfer network created to serve the needs of financial services.

XRPUSD is a tailored cryptocurrency to work on the Ripple network.

When was it created?

Ripple was founded in 2004 as Ripplepay but the first XRP ledger was launched in 2012.

Why should you care? 

Ripple created the XRP token with the goal of solving a real-world problem with blockchain and Cryptocurrency.

Some fun facts about XRP:

• You can’t mine Ripple.

• The total supply of XRP is capped at 100 billion.

• Around 55 billion are in circulation.

• It’s down 12% year-to-date.

• Over 70% away from its all-time high.

The lowdown…

In December 2020, the SEC sued Ripple for selling digital tokens without registering the token.

Fast-forward to today, although these claims have been partially dismissed by the court – the SEC has asked that Ripple Labs be fined a whopping $2 billion.

This has evolved into an ongoing legal battle, creating much uncertainty over the outlook for Ripple.

The bigger picture

How this legal standoff between Ripple and SEC plays out could significantly impact Ripple’s outlook and market regulation in the wider crypto space.

The SEC must file a sealed reply brief by Monday 6th May and the redacted version (excluding sensitive information) for the public by Wednesday 8th May.

Note: In the lawsuit, the SEC proposed a $2billion fine but Ripple has countered with a much lower settlement of $10 million. 

What does this mean?

After over 3 years, the SEC vs Ripple saga could be coming to an end.

The next major step is for the court to decide on the financial penalty size with the final ruling expected between July and September 2024. 

A bright spot

Last month, Ripple announced plans to launch a stablecoin pegged 1:1 to the US dollar in 2024. 

Note: A stablecoin is a form of digital asset that can be used to make payments. 

Should this become a reality, it could boost the utility of XRP – potentially leading to higher prices. Last Friday, Ripple’s CTO David Schwartz announced that more information about the stablecoin will be presented in mid-June.

Focusing on this week…

It’s all about the SEC’s reply to the ongoing lawsuit:

• A favorable response from the SEC may reduce the odds of a hefty fine –  potentially boosting XRP.

• If the SEC presses on with the $2 billion fine and the court case drags on, this could hit XRP.

Looking at the technical…

XRPUSD remains choppy on the daily charts with bulls and bears locked in a fierce tug-of-war.

Support can be found at 0.4750 while resistance is at 0.6650. Still, prices seem to be pushing higher after creating a 2024 low at 0.4059 back in mid-April. However, prices are trading below the 50, 100, and 200-day SMA. 

• A solid breakout and daily close above 0.5675 could inspire a move toward the 200-day SMA and 0.6650.

• Should prices slip back below 0.5350 could trigger a decline towards 0.4750. 

• Bitcoin ↓ over 15% in April

• Crypto hit by “higher for longer” stance

• Fed meeting in focus

• 261.8 Fibonacci level key reference point

• RSI signals that prices are near oversold
  

Could the party already be over for Bitcoin bulls?

Well, the “OG” crypto ended April over 15% lower despite the infamous halving event almost two weeks ago.

Investor appetite for Bitcoin has been hit by the prospects of “higher for longer” US interest rates with ETF outflows feeding bears further. According to Bloomberg, a group of almost a dozen US spot Bitcoin ETFs saw net outflows of $182 million in April. 

Since the launch of Bitcoin ETFs in January 2024, we may have entered a phase in the crypto currency’s evolution where it responds more to economic data releases, especially from the U.S.

Market participants will today have their attention turned towards the U.S Federal Reserve rate decision this evening which is expected to conclude with rates left unchanged at 5.5%.

So, attention will be directed towards the policy statement and comments from Federal Reserve Chair Jerome Powell for fresh clues on the central bank’s next move.

And that’s not all…

Friday’s US jobs data promises to rock this crypto as investors are looking to see data continue to show strength in the US labor market.

• Average Hourly Earnings: est. 0.3%

• Unemployment rate: est. 3.8%

• Non-Farm Employment Change: est 240k

Note: Traders are currently pricing in a 75% probability of a 25-basis point cut by November with a move fully priced in for December. 

Bitcoin has already shed roughly 6% today and may extend losses if the Fed strikes a hawkish stance.

From an Elliot Wave perspective, Bitcoin is in a correction phase following its year-to-date high of $73850, which marked the end of wave 5.

It has since been confined within a downward-sloping channel, later morphing into a falling wedge.

While putting this article together, Bitcoin is piercing through the downward-sloping support line. A break will only be confirmed if we have the current daily candle stick close below the support line.

A break of the lower downward sloping line (support) which has acted as a demand zone since March 5th, 2024, may see Bitcoin bears (those looking to see the cryptocurrency decline further) set their sights on the following near-term support levels.

• 58054.45: The 261.8 Fibonacci level

• 54969.63:  An important price value

• 50000: A psychologically important round number

The Fibonacci level is taken from the November 21st low of 15475.50 to the July 13th, 2023, high of 31789.20.

On the other hand, Bitcoin bulls, (those looking to see the cryptocurrency rally), may have their eyes set on the following near-term resistance levels.

• 58054.45: The 261.8 Fibonacci level

• 59423.42: The downward-sloping trendline of the falling wedge

• 63575.67: The upper resistance of the downward-sloping channel

When considering the Relative strength index, – an indicator that identifies overbought (too many buyers) and oversold zones (too many sellers), It is worth noting that Bitcoin is flirting with the  oversold level