Zinger Key Points
- Ted remains optimistic, noting that inflation is likely to meet the Fed's target and the U.S. economy remains strong.
- Maintaining support at $66,000 is crucial for Bitcoin's price structure and preserving the shorter-term trend.
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Cryptocurrency markets are awaiting a potentially pivotal Wednesday, with the Federal Open Market Committee (FOMC) meeting and key US inflation data releases looming large.
What Happened: Crypto analyst Ted highlighted significant market-moving events that could impact Bitcoin BTC/USD and other cryptocurrencies.
Ted detailed the implied weekly ranges for Bitcoin and Ethereum ETH/USD: Bitcoin is expected to fluctuate between $64,900 and $74,300, and Ethereum between $3,399 and $4,014.
“Week Size = Huge: June FOMC + US Inflation Data to Move Markets,” Ted tweeted, emphasizing the potential for significant volatility.
Last week’s robust employment data has dampened hopes for an imminent rate cut, impacting both the crypto and stock markets.
“The market now almost completely pricing out a July rate cut by the Fed, with the probability of a cut lower by ~10% when compared with this time last week,” Ted noted.
Bitcoin, along with other cryptocurrencies, has borne the brunt of this decreased risk appetite. For the first time in a month, outflows were recorded from spot Bitcoin ETFs.
Ted attributed this to Friday’s jobs report, coupled with fears surrounding U.S. inflation data and the FOMC meeting.
“This reaction seems driven by short-term fears, which, in turn, create opportunities for those with a longer-term vision,” he stated.
Despite these short-term concerns, Ted remains optimistic about the overall economic outlook.
“Inflation appears set to meet the Fed’s target this year. Robust employment data reassures us that the U.S. economy remains strong,” according to the analyst.
Why It Matters: The analyst also highlighted the continued fiscal spending by the U.S. government, which injects nearly $1 trillion per quarter into the economy, providing ample liquidity to potentially propel risk assets higher.
Ted observed that it is common to see significant “de-risking” ahead of major macroeconomic events, leading to lower prices as traders and investors hedge or sell off risk assets to avoid being caught unprepared.
The spike in Bitcoin’s 25-delta skew is another indicator, showing that options market participants are seeking protection against a potential decline in Bitcoin’s price.
For Bitcoin’s price structure, maintaining support at $66,000 is crucial. This level, corresponding to the 1D 50EMA, is key for preserving the shorter-term trend.
“Ultimately, the future of Bitcoin and other risk assets will hinge on this Wednesday’s developments—and it looks like the market is better prepared for a hawkish stance from Powell than a dovish one,” Ted commented.
What’s Next: Looking ahead, Ted sees potential for a significant adjustment in expectations for a July rate cut, which could lead to higher prices for risk assets.
“I don’t see any advantage in betting against risk assets based on this event alone; the risk/reward seems to favor those bullish risk,” he concluded.
These insights will be of particular interest at Benzinga’s Future of Digital Assets event on Nov. 19, where industry leaders will discuss the implications of such economic events on the digital assets market.
Read Next: Bitcoin Plummets To $67K And ‘This Move Isn’t Over,’ Warns Analyst
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