Hey, guys.
Hope you're okay. This is a weekly update on bitcoin.
In the last review on August 4, we traded around 57k, and warned that we can go lower and test the zone 50-52, in the end there was a flash crash and the price reached at the moment 48k, the reasons I think you know, but I will duplicate - it is bad data on the labor market in the U.S., as a consequence of the correction in stock indices, and added to this downward movement, the increase in the rate of the Central Bank of Japan, which later canceled it leaving it at 0.1%, as well as the negative added geopolitical situation in the Middle East.
At the moment Monday the instrument is trading below 60k, although there was an attempt to break this zone, but we see a pullback. Local support is at 56.5K, if this zone is broken, the price is likely to test the local minimum around 50K, whether it will be 52-50 or a drop below is not important, but we should be ready for it. At the lows formed a V-shaped reversal and often such a formation is tested.
On the daily chart the price broke through its EMA 50, 100, 200 which is not very good for buyers, and to talk about a full-fledged reversal it is necessary to expect a return above at least 200 EMA.
On the cluster chart there are huge volumes traded around 50 K, and I expect that this support will hold and it was a local bottom, but as I said above there may be tests of the support and short-term bays down to land extra hands, which are now actively gaining longs.
This week the main event for the market is the US inflation data Aug14. The forecast and previous value is 3%. Three scenarios are possible:
1. The data will coincide with the forecast - moderately positive or neutral effect, maintaining the current market dynamics.
2. The data is worse than forecast - negative effect, stock market decline by 2-4%, cryptocurrencies - by 10%.
3. Data better than forecast - positive effect, stock market growth by 2-4%, cryptocurrencies - by 5-7%. Given that inflation was rising in the same period last year, the probability of scenarios 2 and 3 is high.
