Bitcoin is set to close the week above $20K, despite the fact that various prophets of doom had predicted disaster after the release of U.S. inflation data (9.1% YoY).
At the time of analysis the main cryptocurrency is trading at around $20600.
Market capitalization $929 billion, BTC index dominance 42.5%.
Equity markets closed the week higher, with the
Nasdaq at +1.79% and the S&P 500 at +1.92% closing at 3863 points.
The same people who predicted disasters for bitcoin had the same idea about the stock markets, in fact between last Monday and Tuesday there were record levels on the various short ETFs and net short futures positions on the indices.
The reality of the facts is that they were all obliterated, as we had assumed in Tuesday's analysis.
When everyone expects one thing, often the exact opposite occurs.
One interesting aspect about the closing of the indexes, was the good growth in the last half hour of the session.
Generally in periods of uncertainty on Friday traders tend to fix profits, but the fact that they increased positions instead shows confidence and optimism in the short term.
In this regard, the volatility index also fell to monthly lows.
Yesterday was Biden's visit to Saudi Arabia, with the aim of mending relations with the Saudis, which have been in crisis because of the murder of journalist Khashoggi.
The goal is to achieve an increase in oil production to reduce world crude prices.
Pressure from the American public, however, forced Biden to have to raise the Khashoggi issue with Prince Bin Salman, and this undoubtedly did not favor the negotiations, which did not go as hoped even judging by the rising crude oil price.
Industrial production in the United States in June showed only a slight decline and retail sales increased, as did bank balance sheets.
This will therefore allow the Fed another aggressive hike in interest rates.
The next two weeks will be particularly interesting, in fact starting next Monday we will have the release of the quarterly reports of many major companies, as well as the FOMC (federal open market committee) meeting, which will decide on fed funds rates.
July 20: Tesla
July 26: Google and Microsoft
July 27: Meta & FOMC meeting
July 28: Apple
Aug. 4: Amazon
On the crypto front, bitcoin yesterday updated local highs to $21200, then fell to test intermediate support in the $20500 area where it remained for several hours.
Ether is back in the $1200 area, with the migration to the PoS consensus algorithm scheduled for September 19, 2022 (it is always good to specify the year since it has been talked about since 2018, nda).
There could be a good increase in anticipation of this date or a temporary drop in case of yet another postponement.
The top altcoins have reacted well to the main cryptocurrency's reaction to the U.S. CPI data and I believe they will maintain the trend if Bitcoin preserves the $20500 level.
The medium-term trading range is still between the mid-June lows at $18K and the July highs in the $22K region.
The range adjusted for short-term price action is of course narrower, between $18,900 and 21500.
I often get questions about the trading ranges indicated in the analyses. This is very valuable information, if properly exploited with a discretionary or semi-automated approach.
In the coming days I will prepare an in-depth discussion on how best to use trading range information.
A curiosity about Saudi Arabia, since we discussed it in the analysis.
A study by the Kucoin exchange found that the popularity of cryptocurrencies in the Middle Eastern country has grown exponentially in recent years.