Daily Report – Bitcoin and Market Update (September 21 2022)
The middaily chart displays visible weakness, as BTC struggles to hold the 18-19k USD support.
After the CTF Trailer broke down into a new downwards tail below 20500 USD, the lower time frames seem to be displaying technical weakness and lack of conviction from the traders for where there market should be heading next.
Since June’s lows, Bitcoin prices have continued to move within a sideways pattern 17.5-25k USD. This secondary sideways movement suggests that neither bulls, nor bears can feel safe. The horizontal patterns do not promote any concrete direction in the market. Instead, it promotes mean reversion and trading range environment, where prices bounce back and forth off the swing lows, and off the swing highs.
As a result, it is possible for BTC to continue to swing between the 17.5k USD low area, and the 25k USD high area, until a valid breakout resurfaces.
The MTF chart reveals the BPRO Bands range at 18200-20200 USD.
After falling below 19000 USD support, the short-term price action looks like BTC is willing to build yet another and smaller range between 18500-20000 USD.
This, combined with today’s expected volatility burst coming along with the FOMC meeting, may increase the financial risk throughout the next days.
Ahead of the FOMC board’s decision about the interest rate hakes, target rate probabilities suggest traders expect 84% chances for a 50-75 bps hike. So, the market is more certain about pricing in 50-75 bps hike.
However, for the CPI inflation not coming off as much as expected greater rate hikes are still possible. As price trends are driven by expectations of future earnings, more aggressive hikes may trigger dump.
The hourly chart is not revealing any specific divergence system alerts.
As a result, BTC is not showing any reversal symptoms on the short term basis.
If anything, this may well be a sign of continued lack of persistence in any direction and that the market is more likely to continue moving sideways toward the FOMC meeting.
Quite often, as the anticipation builds toward the FOMC, prices can ascend, only to descend even faster as traders apply the “sell the news” rule of thumb or heuristic.
With the extreme fear sentiment, the chances are that BTC triggers a selling event if the expectations are not met, or the announcement is more aggressive rate hikes than the ones anticipated.
Beware the volatility spikes. Most traders would do best if they avoided to trade through the event, later today at 6:00 PM UTC.
Hope it helps. God bless.
P.S. Check the tweet and vote:)