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"Digital Gold" is Preparing to Update the June Low

9/5/2022 2:52 PM

The BTC/USD pair is under pressure after the statements of the head of the US Federal Reserve, Jerome Powell, made at a symposium in Jackson Hole, where the official indicated the readiness of the regulator for a serious tightening of monetary policy in the future.

Thus, investors lay a 70% chance of raising interest rates by 75.0 basis points at the department's meeting on September 21. If the forecast is realized, the US dollar will continue to strengthen, and the interest of traders in the first cryptocurrency will continue to decline, increasing the likelihood of bankruptcies of crypto companies. Against the backdrop of the existing uncertainty in the market, market participants are forced to close long positions and redirect their capital to the US currency, which leads to a stronger downward trend in the BTC/USD pair.

According to historical data since 2017, in September, the trading instrument either actively lost value or was in a side corridor. At the moment, the leading indicator of the crypto market, the Crypto Fear & Greed Index, has again consolidated in the red zone, indicating the alarming mood of investors against the backdrop of rising US recession risks and the EU. Thus, if the US Federal Reserve adjusts the interest rate by 0.75% during the September meeting, then the US dollar expects further strengthening, and the BTC/USD rate may drop to November 2020 levels in the area of 13200.00.

Meanwhile, the Chicago Mercantile Exchange (CME Group) announced the listing of BTC and ETH futures denominated in European currency and settled at a ratio of 5 BTC and 50 ETH per contract. According to the site's representatives, the decision is based on the rapid growth and high liquidity of existing products based on these digital assets. Tim McCourt, Managing Director and Head of Securities and Alternative Investments, said this would allow investors to have precise instruments to trade and hedge their exposure to the two largest cryptocurrencies by market capitalization.

The long-term trend remains downwards, and the trading instrument is falling towards 18500.00, after which breakdown, the downward dynamics will continue with the target at 13200.00. Otherwise, a repeated correction to the resistance area of ​​24900.00 will begin.

The medium-term trend is also downwards. After an unsuccessful attempt to break through the resistance level of 20480.00, the quotes are falling to the support area of ​​19500.00, upon the breakdown of which the next target will be 19000.00.

Resistance levels: 24900.00, 27444.00, 32100.00. | Support levels: 18500.00, 13200.00.

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