Bitcoin moved within the range of 56552-60334 during the day. At the time of writing the Review, the price of the main cryptocurrency was 57602
Market capitalization 2.1 trillion, Bitcoin dominance index 53.88%, fear index 43
Stock markets fell before the Fed meeting (but the S&P 500 did not go below 5000), then rose on information about a slowdown in balance sheet contraction, then fell again on Powell’s gloomily cautious rhetoric. As a result, the S&P 500 closed at 5018 (minus 0.34%). The Nasdaq fell 0.70%.
The main thing Powell said:
- Current rates suit the Fed; there are no plans to raise rates.
- The rate of decline in the balance has slowed down by more than 2 times since June 1 (from 60 billion to 25 billion).
- There is no and will not be stagflation. Because I worked during stagflation and I know what it looks like (a so-so argument, of course).
This is from the good.
On the negative side, Powell said that the Fed will seek inflation of 2%; the regulator is not satisfied with inflation of 3%. And 2% in the current economic conditions will be difficult to even draw. He also said that he has confidence that inflation will decrease, but it is lower than before. And the elections will not affect the actions of the Fed; they will do what they consider necessary (it would be strange if he said something different).
In fact, Powell can say anything, but he will do whatever the situation with debt, banks, and real estate forces him to do. The fact that the US Treasury announced the redemption of debt bonds in May-July for 15 billion suggests that the regulator is forced to move to generating money to cover urgent issues.
Now bond yields are rising, the dollar index is at 105.6, S&P 500 futures are in positive territory, Asian indices, oil and gold are also growing.
From the news today - data on the US labor market at 15-30, and Apple's report after the market closes.
Despite the significant drop in IBIT, which had already fallen to the levels of the end of February, Bitcoin did not update yesterday’s low at 56552; at the Fed meeting it rose to almost 59,500, but then, as expected yesterday, the banquet was spoiled by Powell’s rhetoric. Bitcoin has returned almost to its original level, and, after unsuccessful attempts to consolidate above 58K, it is moving in the range of 57000-57500.
The main negative for Bitcoin is outflows from ETFs. Most likely, they will continue, since the retail audience of ETFs is especially prone to deer behavior (all normal Bitcoins were bought earlier and without ETFs). Therefore, there will be no influx from retail until Bitcoin fixes above 65K. Although it is very likely that BlackRock will simply resume Bitcoin purchases.
The inability not only to return above 60K, but even to gain a foothold above 58K is bad. But the fear index, which for the first time since September 2023 reached such values, is good. If the dollar index goes below 105.5, it will be even better.
We are also expecting positive things from the MicroStrategy and BlackRock events (not necessarily, but possible).
But no matter how events unfold in the short term, the medium-term prospects are obvious.
Because mathematics plus global reasons for growth.
No short-term shocks affect this.
Example: it has been said many times that in 2020-2021, 22% of all existing dollars in the world were injected into the world economy.
How has the purchasing power of the dollar fallen since January 2020?
It fell by 25.14%. Those who kept $100K in cash now actually only have $75K.
Markets in the short term are not mathematics, but psychology.
But in the medium term, mathematics still wins.
It will also win in the crypto market.
The priority option for today is Bitcoin in a range with a lower limit at 55000-54800 and an upper limit at 60000-60500
Alternative - consolidation above 60500
#Bitcoin #
