Today's statement from the Fed will be eagerly watched. For me, it's unthinkable that the message will deviate from 'Rates are low and are staying low, and we have plenty more ammo to fight anyone who dares sell their stocks.' Rising asset prices are the key driver of confidence that is preparing the world to 'come back stronger.' The Fed will not remove the punch-bowl until way, way after inflation is above target.
My favorite story from today was courtesy of the self-proclaimed doge father: Apparently, Tesla sold 10% of their Bitcoin holdings, "to demonstrate the token's liquidity." Yep, it was definitely that... and not the $100M in profit.
Having looked through all the usual on-chain data points, I can confirm not much is happening. It feels like Bitcoin may just go into another protracted holding period.
The only meaningful data point to suggest otherwise is we had the 'second highest deposit of Tether to exchanges' day this year late last week.
$2.3B was sent on Friday: and that's a lot of dry powder to be sitting around, not earning a return.
It's also some serious commitment to buying the dip.
Bitcoin bounced along its first support level of $54,250 today, as the intermittent rallies failed in their attempts to challenge resistance at $56,600. The bulls will have to do better tomorrow, or else Bitcoin will break lower and approach the $53,130 support level with uncertainty in the minds of the bulls who have just re-entered.
Below $53,130, there is very little to stop prices from moving quickly to $50,225. If the bulls fail to turn out in force, then a retest of the recent lows at $47,515 awaits.
On the upside, if the market remains above $54,250, confidence will build and the first real challenge of resistance at $56,600 will commence. It's likely to be hard work the first time around, so I would expect Bitcoin to continue trading in a $54,250/$56,600 range.
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With investors looking at the next Fed monetary policy meeting, equity indexes rose yesterday. The S&P reached new records while the Nasdaq closed within 20bps of the all-time high.
Welcome to the Weekender: Your weekly round up of the most viewed stories of the week, as voted by you, our readers. This week has seen the negative news flow replaced with tales of adoption, it appears the central bankers, country leaders, and the financial institutions have all agreed: Digital finance is here to stay.
Yesterday, the US reported CPI data—an index calculating the price increase or decrease of a basket of goods. The number is higher than expected and indicates inflation is picking up.