A summer conducive to risky assets? – Risky assets are bouncing back and it may not be over. the Bitcoin almost bounced back 40% since June 20 and Ethereumhim, offers himself a raise of 80% in view of The Merge. On Wednesday, the FED will announce the new interest rate decisions. Also, players are awaiting the publication of the results of American tech giants such as Alphabet (Google), Apple, Meta (Facebook), Amazon and Microsoft. As you will have understood, it is an important week which should bring volatility. It is likely that all these events are already prices by the market, it will still be necessary to be vigilant. For this, nothing better than to take a step back from the situation, let’s take a look at the charts.
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Bitcoin is struggling to continue its rise…
With Bitcoin bounce and even broke his interval on the rise. After only a few days outside the range, Bitcoin is showing signs of weakness :
At the end of May, Bitcoin broke out of the range from above and reentered it very quickly. The reintegration of the range had led the price towards the support and the support had given way.
When a range is broken on the upside, sellers have positions in the red because they are selling at the resistance level. Once crossed, the buyers’ goal is to keep the sellers bent. Gold, the re-entry of a range shows that the sellers succeeded in bending the buyers in an environment that was favorable to them. It is for this reason that in technical analysis, we are wary of reinstatement as we currently have.
And to reinstatement is confirmed, it is likely to find the Bitcoin at the level of the Support which is at $19,200. It is not excluded to relive the situation of the end of May and to make a new low. The momentum remains solid at the moment and could support the course. This could allow Bitcoin to recover in extremis.
Risk off: Gold rebounds at the weekly support level and the dollar blocks on the resistance
Gold tries to recover to $1,690
We were talking about it last weekgold has found bracket at $1,690 :
Since April 2020, gold seems to be settled in a interval including the upper limit at $1,970 and the lower bound at $1,690. The support is once again doing its job and the bullish trendline is near. The price will have to keep the support and the trendline to avoid slipping below $1,690.
For the moment, the primary trend is bullish on this asset. A break of the support would taint the momentum of gold in the medium term. Buyers need to defend these levels. The momentum is now bearish.
The dollar is stuck
Last week, the European Central Bank (ECB) decided to raise rates. However, the dollar index is a measure of the value of the dollar against a basket of currencies including the euro. It would seem that the ECB’s announcement contributed to to slow down the dollar:
It’s too early to think that the rise is over for this safe-haven asset. For the moment, the course is done reject on resistancebut there is still no change in dynamics. It would have to block at this level and join the Support in the weeks or months to come. It should be kept in mind that risky assets tend to rise when the dollar is weak.
The momentum could start to weaken, but, again, there is nothing confirmed at this time. The RSI is rarely in overbought conditions like it is right now. If the momentum continues to fall, it will show that the upside is running out of steam and that sellers could take over.
Bullish continuation for the US market?
The figures of the various companies mentioned in the introduction should not spoil the party, because the US market rebounds and could continue to rise.
The S&P 500 rises again and breaks resistance at $3,900
The buyers manage to make the sellers yield. The resistance to $3,900 finally break:
After having stumbled twice against the resistance at $3,900the buyers manage to break through the resistance. At the same time, the bearish trendline give in. On a daily basis, the dynamic is now bullish with troughs and rising peaks.
Now buyers need to do their utmost to avoid falling back below the resistance that has become Support. The momentum is solid and could score a divergence closing above 65. If buyers push, the next resistance it is located at $4,165.
Coinbase continues to push towards $84
Coinbase stock appears to have found buyers and the rise does not seem to be over :
Buyers definitely need to keep pushing for changing momentum on a daily and weekly basis. For this, the price must close above $84. For the moment, the course is done reject at the downtrendlinebut the area identified with $63 (green) seems conducive to a bounce to pick up $84 even $104 (0.382 Fibonacci retracement). RSI momentum broke the bearish trendline and it could give buyers strength.
In short, Coinbase seems short term bullishbut the underlying trend remains bearish. It is absolutely necessary to change dynamics by closing above $84.
NASDAQ Confirms Bullish Divergence
The Nasdaq is in the same situation as the S&P 500:
The NASDAQ is showing encouraging signs. Indeed, after two failed attempts, the buyers manage to sell the resistance at $12,200. This area now needs to become a Support for the class. If so, the next resistance is about $13,000. The course is again bullish thanks to the fence above $12,170.
Also, the momentum confirms a bullish divergence managing to pass over 54 of RSI. This shows that the downtrend is fading and that buyers can take advantage of it.
The market is showing encouraging signs for risky assets. The dollar is starting to lose strength even though it remains in an uptrend for the time being. The S&P 500 and the NASDAQ have managed to break through resistance and may well continue to climb. Beware, the week is busy and disappointing results could bring sellers back. the Bitcoin shows some excitement as it re-enters the range between $21,800 and $19,200. Buyers need to react quickly. Whatever happens, Bitcoin is likely to follow the movements of the US market, because it is a risky asset. It remains to be hoped that the results of Gafam will not surprise the players and that the rebound initiated on the markets will continue.
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