Daily Market News: Did the Fed move Bitcoin?


daily-forex-market-news-analysis

Mati Greenspan, Senior Market Analyst at FX broker eToro, has provided his daily commentary on traditional and crypto markets for April 10, 2019. The text below is an excerpt and does not contain the full analysis.


Highlights include:

  • Bitcoin Testing $5k: Bitcoin broke below its resistance at $5,350 and is testing the historically important figure of $5,000 per coin.
  • Fed Behind BTC Drop? The FOMC’s signaling of caution due to financial instability could be behind bitcoin’s drop toward $5,000. The announcement came 30 minutes before BTC’s spike in volatility.
  • Brexit Deadline Extended: The UK’s deadline to work out a deal to leave the EU has been extended to October 31st. The Pound Sterling has been surprisingly stable over the past few weeks, but is trading in a descending triangle with psychological support at 1.30 (GBPUSD).

Traditional Markets

Brexit has a new deadline and the UK will be leaving the EU by October 31st at the latest. What’s most notable about this update is that it now seems the United Kingdom will be participating in the European Parliament Elections on May 23rd.

The implications of this are probably more intricate than the workings of a black hole and negotiating this exit seems more complicated than photographing one. The markets seem to be taking this news in their stride.

Looking at the Pound Sterling over the last few weeks, it actually seems surprisingly stable. Watch out for that descending triangle with psychological support at 1.30.

Source: etoro

Bitcoin Chart

As you know, we’ve been tracking a new resistance level on Bitcoin at $5,350 (dotted white line). Last night, it managed to break this level, but not in a good way. As you can see, the move higher was quickly followed by a move lower, making this a false breakout.

Source: etoro

Did the Fed move Bitcoin?

The question here is what drove it over that line and back again?

Some have suggested that it was a result of the Federal Reserve announcement, which seems pretty intriguing given that Wall Street is now making up a more significant portion of this market.

At a glance, it seems that this theory may even hold water. The time of the announcement can be seen in purple here.

Source: etoro

As we know, correlation does not necessarily mean causation, but what we can say is that in the 30 minutes following the announcement Bitcoin experienced more volatility than gold, the Dow Jones, and the US Dollar combined.

Of course, traditional markets weren’t at all surprised by the fact that the Fed is being cautious, nor that their caution, if left unchecked, could lead to risks down the road. It’s just that the narrative that Bitcoin is rising on insecurity surrounding the Fed could be particularly compelling to some.

Updates: Still looking to pass the torch off soon enough. Very sorry for the delay. We’re still waiting for the baby and praying. Exhausted!

Wishing you an amazing day.


Mati Greenspan can be found on LinkedInTwitter, or etoro

This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.

Related News

arrow

Daily Market News: Did the Fed move Bitcoin?

4

Send this to a friend