First Mover Asia: Crypto Traders Laying Low While Fed Ponders; Bitcoin, Ether Gain
By Muyao Shen | Damanick Dantes
Market moves: Bitcoin moved above $47,000 a day before a Fed decision on combating inflation.
Technician’s take: Bitcoin’s tight price range could persist into the Asia trading day.
Bitcoin (BTC): $48,304 +2.8%
S&P 500: $4,634 -0.7%
Dow Jones Industrial Average: $35,544 -0.3%
Nasdaq: $15,237 -1.14%
Bitcoin recovered some losses from Monday, trading above $48,000 on Tuesday. But the optimism may be short-lived as trading volume remained low.
Data compiled by CoinDesk shows that bitcoin’s trading volume across major centralized exchanges on Tuesday was down from a day ago, reflecting a conservative view among traders.
The U.S. Federal Reserve is expected to release its decision on Wednesday on whether it will move faster to wind down its bond purchases and signal if it will start raising interest rates next year. The stock market extended its losses on Monday as investors were closely monitoring the Fed’s upcoming decision.
Ether also moved up slightly, but was still well below $4,000 at the time of publication. Dogecoin, meanwhile, remains the winning alternative cryptocurrency (altcoin) of the day after Tesla CEO Elon Musk said the electric-car maker would accept DOGE as payment for its merchandise.
“I think there are a lot of opportunities in the market from other alternative currencies,” Wald said, pointing out ether’s weaker correlation to the traditional markets compared with bitcoin. “Ether is down 12% in the last week alone, which is very daunting, but at the same time there are a lot of reasons to expect that ether could potentially stage a recovery much sooner than bitcoin.”
Bitcoin Holds Short-Term Support at $46K; Resistance at $50K
Bitcoin four-hour price chart shows support/resistance with oversold RSI on bottom. (Damanick Dantes/CoinDesk, TradingView)
The tight trading range over the past two weeks coincided with slowing price momentum. Typically, trading volume declines when prices move sideways until a decisive breakout or breakdown is realized.
On the daily price chart, initial signs of downside exhaustion have appeared for the first time since July, which preceded a price recovery. Still, these signals are not yet confirmed, especially because multiple oversold readings have not resulted in a meaningful price bounce over the past two weeks.
For now, the intermediate-term uptrend remains weak given the downward sloping 100-period moving average on the four-hour price chart. There is also strong resistance ahead, which could keep sellers in control.
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