BTC/USD extends yesterday’s gains as sentiment shows improvement and the greenback retreats, after its recent Fed-fuel rally
Wednesday's monetary policy decision is weighing heavily on Bitcoin, with the Fed expected to deliver a 75bps hike. There is also nervousness around cryptos in general due to the White House's plans to regulate the industry.
The hotter-than-expected CPI rate yesterday hurt bitcoin. Headline inflation did not fall as much as hoped, and core CPI was much hotter than anticipated. The Fed will continue to hike, and risk-sensitive instruments will remain under pressure, including cryptocurrencies.
BTCUSD is sensitive to interest rates. Yesterday's real rate appreciation (up red arrow) coincides with the decline in Bitcoin (down arrow). As such, it's no surprise that BTCUSD is currently trading below $19K. As long as the daily stochastic remains in its lower quintile, bearish pressure will be present.
Ethereum is about to overhaul its mechanics in an upgrade called "The Merge." The revamp is due around Sept 15 and will transition from proof-of-work to proof-of-stake. This change is greener, using significantly less energy (up to 99% less, according to the Ethereum Foundation), with users validating transactions with tokens instead of mining.
Bitcoin is still under pressure following Fed Chair Powell's hawkish Jackson Hole speech.
Ethereum is showing significant outperformance against Bitcoin ahead of its "Merge."
Bitcoin has broken down out of a bearish continuation pattern.
Bitcoin's daily chart is threatening to move lower. If short-term support doesn't hold, its price will move from a bullish position to a neutral position - a movement of relative weakness.
When the first digital currencies were being developed in the late 2000s, the blockchain technology powering those early-day cryptos wasn't designed with widespread adoption in mind. Fast forward to today, flagship cryptos like Bitcoin and Ethereum, each with millions of users, struggle with scalability issues. In Bitcoin's case, one answer is a new second layer blockchain upgrade called the Lightning Network. There is a lot of excitement surrounding this tech,…
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