On Thursday, Federal Reserve Chairman Jerome Powell is expected to deliver a keynote address highlighting a new strategy to combat “average inflation”. This means that the Fed may allow inflation to temporarily exceed the 2% target if it has been below that level for a long time.
If the Fed adopts this new strategy, it could keep interest rates near zero for five years or more, according to a Bloomberg report.
Ample liquidity is likely to spike asset prices across the board and create bubbles that will eventually burst. If so, investors are likely to lose confidence in central banks and fiat currencies.
Smart investors are likely to seek the safety of gold and bitcoin (BTC) during this time of uncertainty. Larger investors have already started to bundle Bitcoin and bring the number of addresses with more than 1,000 BTC to a new record high.
While this is all good news, traders will want to know whether the cryptocurrency market will continue its current bullish trend or whether a period of expanded consolidation is imminent.
Let’s study the graphics to find out!
Bitcoin / USD
Bitcoin fell and closed (UTC) below the 20-day exponential moving average ($ 11,554) on August 25. This is the first indication that bulls are losing their footing.
The bulls are currently attempting to defend the support area at $ 11,100-10,900 but are likely to encounter significant resistance on the 20-day moving average.
Unless the bulls push the price back above the 20-day moving average, it may drop to the 50-day simple moving average ($ 10,728) and then to $ 10,400.
On the contrary, if the bulls manage to push the price above the 20-day EMA, it is likely to rise to $ 12,113.50. Bears will likely defend this level aggressively.
The 20-day moving average and RSI have flattened just above mid-point, indicating a few days of range action.
The next trend move is likely to begin after the bulls push the price above the $ 12,113.50 resistance zone to $ 12,460 or the price sinks below the $ 10,400-10,000 support zone.
ETH / USD
The bulls’ failure to move ether above the $ 415.634 resistance level on August 24 resulted in profit taking on August 25, pushing the price down to the key support level of $ 366.
Although the bulls bought the decline on August 25th, they are struggling to get the ETH / USD pair above the 20-day moving average ($ 393), which is a negative sign. This indicates a lack of demand at higher levels.
A breakout and close (UTC) below $ 366 could intensify the sale and pull it back down to the 50-day simple moving average ($ 336). Such a move would mean a short-term spike has formed at $ 446.479.
However, if the bulls manage to push the price above the 20-day EMA, it is likely that there will be between $ 366 and $ 415,634 for a few days.
XRP / USD
XRP (UTC) closed above the 20-day moving average ($ 0.284) on August 24, but unless bought at higher levels, the price fell again to the support level of $ 0.268478.
The bulls are currently trying to defend the $ 0.268478 support, but unless they hold the price above the 20-day moving average, the advantage remains with the bears.
If the bears pull XRP / USD below $ 0.268478, it is possible to drop to the 50-day simple moving average ($ 0.25). This is important support to look out for, as in the event of a break the decline could extend to the Fibonacci retracement level of 61.8% at $ 0.241068.
Contrary to this assumption, if the pair bounces off the $ 0.268478 support and climbs above the 20-day moving average, it is likely that there will be a few days between $ 0.326113 and $ 0.268478.
Link / USD
The bulls failed to push Chainlink (LINK) above the upper resistance of $ 16 on August 23rd and 24th, resulting in profit bookings and the price back below the 20-day moving average ($ 14.49) on August 25th pressed.
On the upside, however, lows are attracting bull buying, indicating that sentiment remains bullish. Currently, the LINK / USD pair is again above the 20-day moving average.