- Upcoming Monthly Derivatives Contracts Look Bullish for Crypto.
- Jerome Powell’s (Federal Reserve Chairman), Speech Spooks Market.
- Japanese PM Shinzo Abe's resignation is triggering a response in Forex Markets worldwide.
Kicking off this Monday’s edition of Overbit insights, we’re going to cover 3 main stories, that are macro-trends affecting the market. Kicking off with the first insight will be the upcoming expiration of Bitcoin Futures Contracts, as we are closely watching the last weekly candle for BTC/USD in the month of August, as it currently stands BTC/USD is hovering in the mid 11,000s.
With the weekly close, and monthly close rapidly approaching, the price in which these closes happen at will be a very important signal to watch for the market, as a monthly close above $11,800 would be considered a very bullish signal for the market, and would put bears in an awkward position. The next leg up would put BTC/USD above $12,500, which signals a MAJOR moment, that BTC/USD is on a mission to All Time Highs again above $20,000.
The second major story of the week impacting the market is that of the speech delivered by US Federal Reserve Chairman Jerome Powell. In the annual and much anticipated Jackson Hole, WY, speech, Powell came out quite dovish on Thursday and announced the U.S. economic policy would be relaxed going forward in tackling inflation. Obviously this sent shockwaves across the market, causing hard assets like Bitcoin and Gold to reverse some of their losses earlier in the week.
Interestingly enough, the U.S. dollar gained ground on Thursday as well; even in spite of Powell’s unveiling of a strategy that will allow inflation to run higher than the 2% target. However, at time of release, USD appears to be facing renewed selling pressure. The DXY, which gauges the greenback against a basket of competitors, is trading at a nearly two weeks low.
It’s too soon to tell how this inflationary policy will affect USD, but history has shown us how this type of economic policy has worked to devalue currencies over time. Either way, it is clear how Powell’s new policy will impact deflationary assets. “Powell has shown that there is zero tolerance for deflation so they will do anything to stop it, and that is good for the two hardest assets – gold and bitcoin,” Raoul Pal, founder and CEO of Global Macro Investor and Real Vision Group, tweeted early Friday. Simply put: Another day, another reason to strengthen the bullish case for Bitcoin.
Closing out this week’s Overbit Insights, we’re going to cover international monetary policy, and its effect on the Forex Markets. One of the biggest stories of the week is Japanese PM Shinzo Abe’s sudden resignation, which has triggered a risk-off response, where Japanese stocks are down, and the USD/JPY is down, as the Yen is up. The rise in the Yen against the USD isn’t the only pair rising in value against the USD, as we see the GBP/USD gaining ground, and Gold and Silver rising marginally against the USD.
The big takeaway right now is the USD continues to retreat, while hard assets and certain currency pairs continue to rise. The underlying cause of this USD retreat is the Federal Reserve’s new policy to allow inflation to ramp up - which probably isn’t the best thing for the long-term strength of the USD, but allows for plenty of arbitrage opportunities in markets across the Globe. At Overbit.com we will continue to bring you the biggest insights around the world, and continue to expand our trading and service options, so you have the tools necessary to grow.
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