DIFX DIVE: Weekly Analysis 7-11 November 2022

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The collapse of FTT has caused a selloff in Bitcoin, leading to a loss of confidence in the space. The asset has not seen major liquidations and even though it set a new low, this isn’t a major capitulation for the crypto space.

Yesterday (November 10), the CPI data came out at 7.7% which is 3 percentage points lower than the forecasted 8%. This means that inflation is beginning to cool off at a faster rate than expected which is bearish for the Dollar. The strong inflation data is a signal that the Fed can ease up contractionary measures with lower rate hikes in the upcoming FOMC meetings.

Here are the assets we’ll be looking to in this edition of DIFX Dive:

Bitcoin/US Dollar (BTC/USD)

Bitcoin set a new low this week at $15,600. The CPI data  released yesterday (November 10) was bearish for the Dollar pushing the price action to $18,000. The asset is now trading around $17,300.

If the Dollar slide continues, the price of Bitcoin may experience more gains in the short term. However, the aftermath of the FTT crash may cause Bitcoin to set a new low at the $13,000 – $14,000 level.

  • Market Sentiment: Bearish
  • Next Support: $13,000 – $14,000

The Dollar Index (DXY)

The bearish reversal for the Dollar is confirmed and the asset is trading at $107.8 and is approaching the support at $106.8.

The 50-day EMA was broken clearly yesterday after CPI data came out at 7.7%, indicating a cool-off in inflation. We can expect the Fed to start pivoting from a hawkish stance to a less aggressive policy.

  • Market Sentiment: Bearish
  • Next Support: $106.8

Gold/US Dollar (XAU/USD)

Gold broke through the Fibonacci Retracement Level at $1722 and is now trading at $1761.

RSI is around 70 level on the Daily chart for the first time since the decline from $2000, a clear confirmation that the asset is experiencing a reversal.

The price action can stay between the $1770 – $1780 range before seeing a retracement.

  • Market Sentiment: Bullish
  • Next Resistance: $1770 – $1780

Euro/US Dollar (EUR/USD)

The resistance line at $1.009 is broken. We can expect price action to trade between $1.01 – $1.03.

RSI is touching the 70 level; If the pair breaks above this level, we can see a rapid increase in price action. This is a massive reversal for Euro which has seen a bear run since the Fed started raising the interest rate.

We can expect long positions to increase for the pair as the markets begin to price in the slowdown in the monetary policy.

Market Sentiment: Bullish

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