This is a daily analysis of Coindesk analyst and the approved market technician Omkar Godbole.
Bitcoin Continue to gain ground, in accordance with the opposite escape from the head and shoulders at the start of this week, which opened the door to a rally at $ 120,000.
Prices have gone through the 50 -day simple mobile average (SMA)a widely followed momentum indicator. In addition, the Multiple Multiple Guppy average (GMMA) The indicator teases a renewed bull cross. Together, these two developments can attract dynamic hunters on the market, accelerating the price increase.
That said, there are at least three reasons to continue to be careful. Let’s take a look at these individually.
BTC Sein of the Taurus Fatigue Zone
BTC closes in the bull fatigue area above $ 115,000.
Although past models do not guarantee future results, it should be noted that since July, the Bitcoin bull momentum has always been weakened above the level of $ 115,000, as the long upper wicks reflects on the last two monthly candles.
These long wicks indicate that although the bulls have pushed prices to new records greater than $ 124,000, a high sales pressure forced the price below $ 115,000, reporting a level of key resistance and potential hesitation among buyers.
Does the dollar index have Fed rate drops?
The American labor market weaken at a rapid pace, the traders in the long term have evaluated 70 base points (BPS) rate drops by December 31. This represents nearly three drops in rate of 25 points, from September 17. In addition, merchants estimated a total of 125 softening bps by July 2026, which would drop the reference rate of reference to 3% to 3.25% of the current beach from 4.25 to 4.50.
Market players seem convinced that the central bank will pass beyond sticky inflation, as the consumer price index on Thursday points out and will reduce rates to support the labor market and economic growth. These painful expectations strongly contrast with those of the peers of the Fed, such as the European Central Bank (ECB)which seem to have spent rate drops. In other words, the rate differential promotes the weakness of the USD.
However, the dollar index, which assesses the value of the green back against large fiduciary currencies, continues to hover in the recent beach from 97.00 to 98.00. The index only dropped by 0.20% to 97.55 this week despite the high increase in the drop in the Fed rate.
This raises the question: has the dollar already evaluated Fed rate drops? If this is the case, he could recover from here, the cap of gains in the assets denominated in dollars like BTC and Gold.
The graph shows that the sale in dollars is short of steam since the index reached a hollow of 96.37 on July 1.
During the editorial staff, Bollinger bands, or volatility bands placed two standard deviations above and below the 20-day SMA of the index, were in their tightest since March 2024. The so-called compression means that a large movement in both directions could occur soon. A bullish may not increase well for BTC.
Generational bullish change in yield at 10 years
The expectations of rapid infant rate reductions have fueled the anticipation of a sharp drop in treasury yield to 10 years, which influences borrowing costs for consumers, businesses and governments. Consequently, a slide in the yield at 10 years would probably lead to a greater risk -taking on the economy and the financial markets.
However, the longer -term monthly graphics indicate a generational bullish change in the momentum for yields, which suggests that the disadvantage could be limited. Thus, the flow which provides money in more risky assets motivated by ultra-basic rate expectations may not materialize. In other words, it is unlikely that ultra-basic interest rates soon come back, which should keep attractive attractive income instruments for investors.
The yield in 10 years has increased in the aftermath of the coronavirus pandemic, ending a downward trend of four decades that started in 1981.
In addition, the Mas 50, 100 and 200 months have re-aligned one above the other. Such a bullish configuration occurred for the last time in the 1950s, marking the start of a three decades rally in the reference yield.
The same can be said for two -year performance, which tends to be more sensitive to interest rates expectations.
Read more: Crypto experts retain the prospects for bitcoin bruises while hopes of the Fed’s decline clash with stagflation fears
