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Before the release of the CPI, Bitcoin continued its upward momentum and bounced above the $20,000 threshold.
Market data shows Bitcoin price gaining bullish momentum for 6 consecutive days. Currently BTC is trading around $22,200. The 24-hour trading volume spiked to $45.3 billion (+30%). Looking at the daily timeframe, Bitcoin has bounced back from a key support level, the price has now reached the 50- and 100-day moving averages, converging around the $22,000 region.
If the price breaks the current MA lines to the upside, a crossover will appear. For the market to be considered bullish in the medium term, BTC price needs to break above the key trendline and resistance at $24,000. The RSI has signaled a major bullish divergence before reversing. Currently the signals are showing an overbought situation with values above 70%. This further increases the likelihood of a short-term pullback.
Ethereum continues to advance above the $1,700 mark, currently trading around $1,741. The 24-hour trading volume hit $15 billion, increasing by +25%.
Tokens in the top 10 by market capitalization have not seen too much movement over the past day. The most notable are Solana’s SOL token and Polkadot’s DOT with an increase of +9% and 3%, respectively.
The rest of the altcoins, most of the top 100, are in the red with Terra’s LUNA leading the way, losing 12% in 24 hours. The token previously spiked nearly 300% in a few days to a high near $7.68. The rest of the bearish altcoins are all seeing losses ranging between 0.5% – 4% over the same time period.
On the upside, CEL is the most bullish altcoin on the day with a 14.7% return and is closely followed by a +8% APE. The remaining green altcoins are hovering between +1% – 2%.
The market sentiment has not shown any good signs yet when the Greed and Fear Index (FGI) is at 25 points and is still sinking in the Extreme Fear zone.
While financial markets waited anxiously, Fed officials recently signaled a strong interest rate hike. Investors and analysts believe that the Fed is likely to raise interest rates with a third jump of 0.75 percentage points, after the increase has been applied twice in meetings. in June and July.
Most recently, speaking last Friday, Mr. Christopher Waller – a Fed governor – expressed his hardline consensus with his colleagues. He said he expects a big rate hike in September. However, he also said that policymakers should stop trying to predict the future, and should instead turn their attention to the economic data.
As of Friday, traders in the US financial markets were now betting there was a 90% chance the Fed would raise interest rates by 0.75 percentage points at its September 20-21 meeting. A week ago, this bet only reached 57% – according to data from CME’s Fedwatch Tool. This is the largest interest rate jump since the Fed began using the reference rate as a key monetary policy tool in the early 1990s.
Although he did not mention the specific rate hike, Mr. Waller’s comments showed a tough stance – a sign that he supports a 0.75 percentage point jump and does not want to raise rates only 0. ,5 percentage points.
“Based on all the data we have received since the last Fed meeting, I believe a policy decision at our next meeting will be made easily. As the labor market remains strong and there is currently no trade-off between job creation and the Fed’s anti-inflation target, we will continue to fight inflation aggressively.”
If the Fed raises interest rates by 0.75 percentage points this time, the US reference interest rate will increase to 3-3.25%. Waller said if inflation doesn’t ease for the rest of the year, the Fed will likely have to raise rates to “much higher than 4 percent.”
Mr. Waller said the Fed should give up giving “future direction” on the path of monetary policy and the factors that may appear to influence the decision of interest rate moves.
“I believe it is becoming less and less useful to be future-oriented at this stage of the tightening cycle,” he said. “Future decisions about the rate jump and the destination of policy rates during this cycle should only be dictated by upcoming economic data and the impact those decisions will have on economic activity.” economy, jobs, and inflation”.
The governor pointed to encouraging signs that inflation was falling from its peak of more than 40 years, but said that it should not be “rejoice”. In July, the personal consumption expenditures (PCE) price index, the Fed’s favorite inflation gauge, rose 6.3 percent year-on-year, and 4.6 percent excluding two food groups. and energy. This level of inflation is still well above the Fed’s long-term target of 2% inflation, and Mr. Waller said that inflation is still “spreading” despite weakening.
He also said that last year, inflation seemed to have weakened at times, but then turned to increase sharply until the consumer price index (CPI) rose past 9% in June this year – the highest level since since the end of 1981.
In a question-and-answer session at the Cato Institute on Thursday, Mr. Powell reiterated his view that the Fed will do whatever it takes to fight inflation. He also signaled that the Fed will not pause rate hikes or move into rate cuts any time soon.
“History is a cautionary tale of easing policy too soon. I can assure you that my colleagues and I have a strong commitment to this issue and we will stay focused on that until we reach our goal,” Mr. Powell said.
World gold prices fell at the start of a new trading week in Asia this morning (September 12). Analysts are cautious about the prospect of gold prices this week, saying that the gold price movement this week will depend a lot on the US inflation report to be released soon.
At more than 10 am Vietnam time, spot gold price in the Asian market stood at 1,714 USD/oz, down 4.1 USD/oz compared to the closing session last week in New York – according to data from Kitco. com.
This price is equivalent to about 48.9 million VND/tael if converted at the USD exchange rate sold at Vietcombank and excluding related costs. Compared to the end of the week, the converted world gold price is now down by 100,000 VND/tael.
The series of US inflation reports this week is expected to determine the path of gold prices between now and the September 20-21 monetary policy meeting of the US Federal Reserve (Fed). The US Labor Department is expected to release the August consumer price index (CPI) report on Tuesday and the August producer price index (PPI) report on Wednesday.
Inflation data will be the basis for Wall Street investors to adjust their expectations about the Fed’s interest rate jump at the next meeting. If inflation is higher than forecast, the market will be inclined to the possibility that the interest rate jump of 0.75 percentage points is applied. At that time, the downward pressure on gold will increase.
Conversely, if inflation is weaker than forecast, the market will increase expectations for a 0.5 percentage point jump in interest rates, and the downward pressure on gold will be relieved somewhat.
“If the economic data released this week is much weaker, the dollar will come under pressure to depreciate and that will benefit gold prices,” Walsh Trading director Sean Lusk told Kitco News.
Oanda analyst Edward Moya agrees, saying that weak inflation data will give gold prices a “kick” this week. “If inflation falls sharply, then it is likely that interest rates will not rise above 4%. If that happens, then the USD exchange rate may have passed the peak, providing a relief for gold prices,” Mr. Moya said.
However, Moya also said that if the inflation data were only slightly weaker than forecast, that would not be enough to lead to a shift in expectations about the Fed’s rate decision at the September meeting.
According to analysts, if this expectation does not subside, the recent rally in the gold market will quickly disappear. A bit of optimism returned to the gold market last week, when gold prices completed a mild week of gains and held the $1,700 mark. For the whole week, gold prices increased by 0.3%, marking the first week of gains after 3 consecutive weeks of decline.
The dollar continued to weaken after hitting a new 20-year high last week. This morning, this index dropped nearly 0.3% compared to the close of last week, fluctuating above the threshold of 108.7 points. Last week, there was a time when the index reached nearly 111 points.
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