Opening Bell 🔔

Bitcoin followed our analysis from last week, bouncing out of the previous weekly close before continuing toward the 52k area.

The reaction we've gotten at the support is quite decent, so here are our options now.

1. We just bounce straight from here. The price has formed a 4-hour double bottom and tested it; it could very well send its way back up to the monthly open at 58,950 and potentially higher.

2. Bitcoin remains bullish but may have another stab down on the daily before bottoming and heading back up to the monthly open and other resistances.

3. It pulls back from here and breaks through 52k. If we start seeing BTC close below 50k, we would expect it to trade back towards the 44k region.

We most like scenario one, as the current daily close would provide us with equal lows. That would be a sign of a slowdown in the bearish trend we've seen over the last six months. On the 4-hour chart, we see a nice retested double bottom in the golden pocket.

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This week, from September 3 to September 6, 2024, the S&P 500 experienced a sharp decline of 4.25%, its worst weekly performance since April. The market was largely influenced by weaker-than-expected economic data, particularly the August jobs report, which showed only 142,000 jobs added—far below expectations. This fueled concerns about a slowing economy and the potential for a recession.

The tech sector was hit particularly hard, with Nvidia dropping over 13% after news of a U.S. Justice Department subpoena, contributing to the broader decline in the Nasdaq Composite, which fell 5.77%. Mixed economic signals also emerged from the manufacturing sector, with the Institute for Supply Management (ISM) reporting continued sluggishness in manufacturing activity, while the services sector showed modest growth.

Regarding the Federal Reserve, markets are increasingly pricing in the possibility of a rate cut by the end of the year. Traders are now expecting at least a 25 basis point cut, and some are even speculating about a 50 basis point cut, especially if economic data continues to weaken. This growing expectation is driven by softer inflation data and signs of a cooling labor market, as investors hope for more clarity in the coming months on the Fed’s next steps.

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