Key points:
Bitcoin Surge: Bitcoin has risen 4% since yesterday, breaking out of a symmetrical triangle pattern, signaling potential for further upside.
Strategic Moves: Analysts suggest a long position on Bitcoin while shorting Ethereum due to Bitcoin's increasing dominance and favorable open interest.
Fed's Dovish Stance: The Federal Reserve's recent minutes indicate strong support for a rate cut in September, making it almost inevitable.
Powell's Speech: Fed Chair Jerome Powell is expected to deliver a dovish speech on Friday, which could further boost risk assets like stocks and Bitcoin.
In its latest analysis, 10x Research highlighted a 4% increase in Bitcoin's price since yesterday, aligning with its bullish outlook. The cryptocurrency's decisive move upward, breaking out of a symmetrical triangle pattern, suggests there may be further upside potential. This surge is supported by a $1 billion increase in open interest, with Bitcoin's funding rate returning to a premium.
Given these dynamics, 10x Research recommends a straightforward strategy: going long on Bitcoin while shorting Ethereum. Bitcoin's dominance continues to rise, and its share of open interest increasingly deviates in favor of the leading cryptocurrency.
The analysis also noted that the Federal Reserve's minutes were as dovish as anticipated, with a strong emphasis on the employment aspect of its dual mandate. Current economic data forecasts suggest that the inflation target is within reach. A vast majority of Federal Open Market Committee (FOMC) members support a rate cut in September, with several even considering a July rate cut as a viable option. This makes a September rate cut almost certain.
Looking ahead, Fed Chair Jerome Powell's upcoming speech on Friday is expected to reinforce this dovish outlook, potentially boosting risk assets such as stocks and Bitcoin. The Fed's focus is shifting towards employment when making decisions, with inflation data becoming less central, especially as the Consumer Price Index (CPI) trends towards 2.5% in the coming months. Multiple rate cuts may be necessary to sustain the current economic expansion.
As markets prepare for Powell's speech, analysts and traders are closely watching for signals that could impact asset prices, particularly in the cryptocurrency and stock markets.
