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Daily Bitcoin and Crypto Analysis

Daily BTC Analysis

August 28, 2021
Bitcoin is up 3% on the day, as the Fed assured the markets that it is in no rush the remove the punch bowl.

The key takeaways:

  • Unemployment is still too high, and the Fed policy to promote maximum employment will ensure the economy continues to receive assistance.
  • Inflation is temporary, driven largely by supply chain disruption caused by Covid-19.
  • The Fed sees little evidence that wage increases will lead to excessive inflation.

Stocks rallied, Bitcoin rallied, and everyone rejoiced. The Fed may still taper this year, but that will largely depend on the health of the nation. You can read the full transcript of Chairman Powell's opening remarks here.

With the risk of a surprise now behind us, this weekends trading session is free to retest $50,000. Exchange balances are declining again: The last sustained drawdown of Bitcoin from exchanges saw a price rally of $7,000.

But it's not all good news: The People's Bank of China has returned to Bitcoin bashing. Should prices rally further, we can expect the pace of FUD to increase. Today's message was a reminder to stay away from cryptocurrencies and to 'protect your pocket,' which is a tough message to sell given the retracement since their radio silence.

Technical Analysis 

Bitcoin is consolidating and following the pullback in Equities. It looks okay as long as we have daily closes above $44,000. Support is at $47,000 and the 200-day moving average is at $46,000. Overhead resistance remains at $49,500, 50,500, and $57,500.

Bitcoin has broken the demand line, but bears haven’t managed to follow through on price action yet. This not a big deal until the trend reverses, which hasn’t happened. Support at $47,000 and this level quite has been pivotal over the last few days, with further support at $44,000. Resistance in the near term is seen at $49,500 and $50,500. Bitcoin on the weekly is hovering above $46,800, which is the 50% retrace level from the $65k ATH to the swing low at $28,735. Resistance is still seen at $51,000, $57,500, and $65,000.

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