Bitcoin's green 5-day EMA is above its orange 10-day EMA. This puts the EMAs into bullish formation. Moreover, its stochastic has pushed above 80 (green rectangle). The longer it maintains at this level, the higher the probability of further price increases.
Bitcoin's volatility is expanding as traders try and reinvigorate the cryptocurrency.
Bitcoin is trading above $26,900. This is a positive departure from the $25,000 level, which has acted as a strong support since June. If Bitcoin manages to surpass the $27,000 mark, it will be an important victory for traders. Bitcoin has been in a period of low volatility and reduced trading activity in recent months, indicating a decrease in interest within the cryptocurrency market.
The forthcoming decision by the Federal Reserve this week is poised to have a substantial impact on cryptocurrency prices. The consensus expectation is that the Fed will maintain its current interest rates when it releases its announcement on Wednesday. Investors will closely analyse the language used by the central bank for any hints regarding the possibility of an interest rate hike in November.
Since last year, yields are much higher as the Fed aimed to control inflation. This situation has applied significant pressure on both cryptocurrencies and stocks because when risk-free assets like bonds offer higher returns, the appeal of riskier investments like Bitcoin tends to diminish.
If there are indications that the central bank has concluded its interest rate hikes and is considering rate reductions next year, this could potentially reignite interest in riskier assets. Such a development might serve as the catalyst needed for bitcoin to break free from its recent period of slow growth.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.