Fundamental & Technical Outlook
The Fed's forecast for rate hikes was more hawkish than expected, sending traditional equities into a spiral. The Dow Jones Industrial Average (DJIA), tech-heavy Nasdaq composite, and S&P 500 were down 0.3%, 0.8%, and 1.4%, respectively.
(BTC) & Ether (ETH) saw a quick decline in the early hours of US markets but managed to make a comeback by day’s close. As of this writing, BTC and ETH were changing hands for $19,425 (+4.83%) & $1,327 (+6.23%).
In Europe, U.K.’s central bank took the interest rate stage Thursday, raising its key interest rate by 50 basis points. This marks its seventh consecutive rate hike and pushed U.K. borrowing costs to a 14-year high.
At the September meeting, Fed officials hiked the fed funds rate by 75 basis points and provided their most resolute messaging to date on their willingness to do whatever it takes to battle inflation.
Looking ahead to the remaining meetings in 2022, the rate path forecasts imply another 75-bp hike is likely in November before the pace slows to 50 bps in December as the Fed nears a terminal rate in early 2023.
A report on consumer-price pressures in August sent financial markets into a tailspin last week as elements of “core” inflation, like housing costs, appeared more stubborn last month than economists had anticipated.
According to Bridgewater Associates founder Ray Dalio’s estimation, the Fed must continue to substantially raise interest rates if it hopes to succeed in taming inflation. Because of this, and other factors like the ongoing war in Ukraine, Dalio anticipates that stocks and bonds will continue to suffer as the U.S. economy likely slides into recession either in 2023 or 2024.
BTC’s bearish price action suddenly accelerated Monday following Sunday’s decline but returned above the weekly support zone, then selling pressure increased Tuesday and Wednesday, bringing BTC to a current state of struggle.
On a daily timeframe, BTC is still trading within the current daily support zone established from the opening and close of a daily candle on Sept. 7 ($19,406 - $18,532), after recently breaking below the weekly support zone formed between the weekly close of Jun. 27 and Aug. 8, respectively.
If the bulls
were to hold above the current support zone, then we may refer to a resistance zone formed between the opening ($18,789), close ($19,290) and high ($19,460) price levels of Sept. 7th daily candle).
Between these three levels, if we see a break and close above on a daily timeframe, then the next scenario we would see the previous level ($18,789) becoming a support and the following levels $19,290 & $19,460 forming a resistance zone.
A break and close on a daily timeframe above the $19,290 level would invalidate the previous bearish wave (Sept. 20 - 21), which implies a short-term sentiment change to the bulls.
If the bears
were to break below the support zone, then we may refer to a Fibonacci extension zone measured from Sept. 20 - 21 which can be considered the “drop-zone”.
Within the drop-zone, there are three levels that create layers. A close below the current support daily zone will further increase selling pressure, though some resistance from the bulls is likely in the short term.
In terms of technical outlook on a weekly timeframe, Bitcoin
(BTC) is currently trading within a range set between the weekly close of Jun. 27 and Aug. 8, respectively.
As the price of BTC continues to exhibit bearish sentiment, coming into contact with the trendline seems inevitable, and volatility will likely ensue.
Within the support zone, there are three key levels to pay attention to in the coming weeks, the $13,730 monthly support, the 141.4% ($11,770) Fibonacci extension level measured from Jun. 6 - Jun. 13, and the monthly support of $11,363. This is a likely outcome if the bears manage to break the current range.
Read more: BTC Weekly Outlook
ETH is currently trading above a weekly support trendline, and above this key level we can identify two layers formed within the current support zone we may be facing.
There are two layers within the current support zone. The three Fibonacci extension levels form two layers which identify a resistance level at $1,303 (141.4%).
By measuring the extended Fibonacci levels between the recent bearish wave formation (Sept. 20 -21), a drop zone, a.k.a a future support zone can be projected.
If a break and close on a daily timeframe were to happen in the coming days, we can anticipate three key levels within the support zone, represented by each of the Fibonacci extension levels: 1.272% ($1,175), 1.414% ($1,152), and 161.8% ($1,118).
In terms of technical outlook on a weekly timeframe, Ether can paint both a much bullish picture and an extremely bearish one. For the bulls, the current weekly support trendline measured from Mar. 16 - Jun. 27 marks a point of reference.
Below this support trendline, a support zone can be derived by using the Fibonacci extension tool, which generates three Fibonacci extension levels (127.2%, 141.4%, & 161.8%) measured from the plunge between Aug. 15 - Aug. 22, which coincide with the opening and close of the weekly candle on Jul. 4.
Read more: ETH Weekly Outlook
📌 The topic of the Day
Dogecoin (DOGE) Regains 10th Position Amid Brutal Bear Market
Despite falling below $0.06, the dog-themed cryptocurrency won back 10th place in the crypto rankings by total market capitalization. Polkadot (DOT), one of the OG cryptos established in 2016 by former Ethereum (ETH) Co-Founder Gavin Wood, had previously overtaken Dogecoin (DOGE) on August 8th, 2022.
The news comes just days after Dogecoin (DOGE) became one of the largest Proof of Work (PoW) cryptocurrencies, second only to market leader Bitcoin
(BTC). At press time, Dogecoin’s (DOGE) total market cap stands at $7,497,499,427, according to CoinGecko.
Nearly a year and a half ago, Elon “The Dogefather” Musk’s endorsement of Dogecoin (DOGE) on the Saturday Night Live show seems to not have paid dividends as the memecoin’s market value has plunged by more than 75% since then.
Despite the success of Musk’s recent ‘Twitter Whistleblower’ campaign, it seems that The Dogefather’s constant support of the DOGE Army has barely had any effect on Dogecoin’s (DOGE) market price.
Although it should be noted Dogecoin has gone through a lot of technical upgrades, including the C-Library update and the upcoming Layer-2 solution. Dogecoin (DOGE) developers even joined forces with Blue Pepper for a year-end release.
Meanwhile, Dogechain, an unofficial Layer-2 solution for the DOGE Army, has gained in popularity, with over $300M in Dogecoin (DOGE) being bridged through the solution, even despite DOGE Founder Billy Markus, a.k.a Shibetoshi Nakamoto, turning down a luscious $13 million advertising offer from Dogechain.
At press time, Elon Musk’s beloved Dogecoin (DOGE) trades at $0.056380, putting it firmly in the red at an 8.4% deficit for the past 24 hours.
🗒 Happenings of The Week (Sept. 18 - Sept 23)
🔹 U.S. Federal Reserve hikes interest rates by 75 basis points
- Latest update:
Cardano’s Vasil upgrade triggers
🔹 European Union to Launch Global Metaverse Regulation Initiative and Digital Euro Prototype by 2023
- Stablecoin restriction dropped from E.U. digital asset framework
- Latest update
：New UK bill would give ability law enforcement the ability to “seize, freeze and recover” cryptocurrencies*
🔹 China expands trial of its e-CNY CBDC to four new provinces, including Guangdong
🔹 Nasdaq launches digital asset unit to offer Bitcoin, ether custody for big-money clients
🔹 White House Publishes ‘First-Ever’ Comprehensive Framework For Crypto, Criticisms Follow
- U.S. Voters skeptical of Federal Reserve digital currency, poll finds
- Draft stablecoin bill in Congress to require Fed, state regulator approval
- US Judge Orders Tether
to Prove What Backs USDT
- Draft US Stablecoin Bill Would Ban New Algorithmic Stablecoins For 2 Years
- Latest update：
CFTC files lawsuit against decentralized autonomous organization (DAO)*
🔹 Do Kwon, No Longer in Singapore, Says He’s Not ‘On the Run’
- South Korean Prosecutors Ask Interpol to Issue Red Notice for Do Kwon
🔹 SEC Civil Complaint Against Crypto Influencer Ian Balina
- SEC Claims All of Ethereum Falls Under US Jurisdiction Because of Validating Nodes Distribution
🔹 Wintermute have lost ~$160M in their second incident this summer
- Wintermute CEO Gaevoy updates on hack, says firm will continue on-chain trading
- Latest update：
Wintermute tells hacker to return funds or face legal action
🔹 Hong Kong billionaire Adrian Cheng’s VC firm C Ventures to raise a new $200 million fund to invest in crypto
🔹 Nomura investment banking director to lead crypto subsidiary Laser
- Banking giant Nomura launches crypto VC unit
🔹 OpenSea upgrades NFT drops with 'immersive minting experience'
- OpenSea adopts NFT scarcity tracking tool OpenRarity
🔹 Arbitrum Announces 400 ETH Bug Bounty Payout
- OpenSea to Integrate Ethereum Scaling Solution Arbitrum
- Latest update：Helium Token Holders Approve Switch to Solana Blockchain
Author: Gate.io Researcher Peter L.
This article represents only the researcher's views and does not constitute any investment advice.
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