Bitcoin failed to sustain above the $64,000 mark yesterday, and Ethereum remained below the $1,900 level.
Despite a more dovish, softer stance from Federal Reserve representatives following the decision to keep interest rates unchanged, the cryptocurrency market did not gain any advantage. The risks of interest rate hikes remain quite serious, as does the more aggressive fight against inflation, which Fed Chair Kevin Warsh mentioned extensively yesterday.
The Fed’s decision to keep the base rate in the 3.5-3.75% range for the fifth consecutive meeting formally aligned with market expectations. However, the voting composition turned out to be much more revealing than the decision itself. The vote was a rare 9-3 split, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lori Logan voting for an immediate 25-basis-point rate hike. Such a number of opposing votes in one direction has not been seen since September 2016, and this split gave the decision a noticeably more hawkish tone, beyond the mere decision to maintain the rate unchanged.
During the press conference, Warsh left no room for dovish interpretations. He stated outright that the committee has no soft or implied inflation target, only a target of 2%, and none of his Fed colleagues have any illusions about this. Warsh emphasized that over five years of inflation above the target level cannot be fixed in nine weeks or with a single month of modest price decreases, adding that this Fed will not waver, as trust in the central bank relies on fulfilling its duties.
Such rhetoric directly explains why the cryptocurrency market did not receive relief despite the formally neutral rate decision; the risks of further hikes remain quite credible, and the disagreements within the committee show that the hawkish faction of the Fed is ready to pursue its agenda at the next meeting.
The next Fed meeting is scheduled for September 15-16, and before that, Warsh will speak at the symposium in Jackson Hole from August 27-29, where the market will be looking for new signals regarding whether the balance of power within the committee will tilt towards the three dissenting hawks or maintain the current pause. Until then, the crypto market remains hostage to the same uncertainty as the bond market, knowing only that the path to lowering rates is closed at least until the fall, while the path to raising them remains open.
Regarding short-term trading, the strategies and conditions are described below.
Bitcoin
Buying Scenario
Scenario #1: I plan to buy Bitcoin today upon reaching an entry point around $64,100 with a target for growth to the level of $64,600. Around $64,600, I will exit the buy positions and immediately sell on a rebound (anticipating a movement of 30-35 pips in the opposite direction from the level). Before buying on a breakout, ensure that the 50-day moving average is below the current price, and the Awesome indicator is above zero.
Scenario #2: Buying Bitcoin is also possible from the lower boundary of $63,800 if there is no market reaction to its breakout back towards levels $64,100 and $64,600.
Selling Scenario
Scenario #1: I plan to sell Bitcoin today upon reaching an entry point around $63,800 with a target for the price drop to $63,300. Around $63,300, I will exit from the sell positions and immediately buy on a rebound (anticipating a movement of 20-25 pips in the opposite direction from the level). Before selling on a breakout, ensure that the 50-day moving average is above the current price, and the Awesome indicator is below zero.
Scenario #2: Selling Bitcoin is also possible from the upper boundary of $64,100 if there is no market reaction to its breakout back towards levels $63,800 and $63,300.
Ethereum
Buying Scenario
Scenario #1: I plan to buy Ethereum today upon reaching an entry point around $1,903 with a target for growth to the level of $1,922. Around $1,922, I will exit the buy positions and immediately sell on a rebound (anticipating a movement of 30-35 pips in the opposite direction from the level). Before buying on a breakout, ensure that the 50-day moving average is below the current price, and the Awesome indicator is above zero.
Scenario #2: Buying Ethereum is also possible from the lower boundary of $1,895 if there is no market reaction to its breakout back towards levels $1,903 and $1,922.
Selling Scenario
Scenario #1: I plan to sell Ethereum today upon reaching an entry point around $1,895 with a target for the price drop to $1,876. Around $1,876, I will exit from the sell positions and immediately buy on a rebound (anticipating a movement of 30-35 pips in the opposite direction from the level). Before selling on a breakout, ensure that the 50-day moving average is above the current price, and the Awesome indicator is below zero.
Scenario #2: Selling Ethereum is also possible from the upper boundary of $1,903 if there is no market reaction to its breakout back towards levels $1,895 and $1,876.
