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Bitcoin Rises – Traditional Markets Fall

Bitcoin Rises - Traditional Markets Fall
๐Ÿ•™๏ธŽ Reading Time: 2 minutes

Bitcoin and Ethereum at the beginning of the week

Bitcoin and Ethereum are starting to trade higher this week than they did over the weekend. Before reversing on Monday, both major cryptocurrencies fell below key psychological levels.

Bitcoin price rose 1.9% on high volume, regaining some of the 2.52% lost over the weekend. The spike in volume following Mondayโ€™s upward push is an additional positive sign.

However, BTC continues to trade in a relatively narrow range, alternating days of ups and downs. BTC is currently trading above the psychologically important $19K mark.

Ethereum is up 2.6%. ETH has regained the psychologically important $1,300 mark. The supply of the second largest cryptocurrency by market cap has increased by 8,400 ETH since switching to the Proof-of-Stake consensus mechanism.

Economic calendar

The calendar looks relatively calm ahead of important data on durable goods and home sales due today.

The yield curve between 2-year and 10-year Treasury bonds remains inverted as rates on the former are higher than on the latter.

This means that investors take more risks in short-term lending than in long-term lending.

Historically, inverted yield curves have shown the onset of economic recessions, which negatively affect all risky assets, including cryptocurrencies.

US Stocks

Traditional stocks fell as the Dow Jones Industrial Average (DJIA), the high-tech composite of the Nasdaq and the S&P 500 were down 1.1%, 0.6% and 1%, respectively.

Technical Analysis

Bitcoin is trading higher amid falling traditional markets. Its resilience is interesting given its tendency to trade alongside the Nasdaq Composite, which fell 0.8% on Monday.

Traditional financial markets traded lower on Monday mainly due to fears of a global recession. The British pound fell to a record low after the news that the Bank of England wants to aggressively raise interest rates.

The Bank of England will join a growing list of central banks that are pursuing a tight monetary policy, including a sharp increase in interest rates.

BTC still looks neutral and is essentially trading where it was in mid to late June. A short-term price peak of $24K in mid-August was followed by a steady decline to current levels.

The current price level of $19,000 is about 20% below the August peak, which presents a set of opportunities for optimistic traders.

Technically there is no cause for concern, but there is no special cause for celebration either. The BTC Relative Strength Index (RSI) is 42, which is a neutral value.

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