- Cryptocurrencies continued to trade relatively quiet following the Federal Reserve meeting.
- Bitcoin briefly crossed the $10,000 level before stalling.
- Bitcoin (BTC) resistance lies at the psychologically important $10,000 level, while support can be found at the lows of the week at $9,000.
The beginning of the week started on a positive note for most asset classes on the heels of a much stronger than expected jobs report. Newly released data showed that the U.S. economy gained 2.5 million jobs in May, while the unemployment rate dropped from 14.7% to 13.3%. Stocks, gold (@GC), and cryptocurrencies cheered rose slightly after cheering the news.
In other macro-economic news, the Federal Reserve announced that interest rates would remain the same for the foreseeable future. The Feds’ “dovish” stance (easy monetary policy and low-interest rates) had a mixed effect. Technology stocks finished strong, value stocks reversed course, and cryptocurrencies rose. Gold and BTC cheered the news from the fed and rose following the announcement. Many investors see gold and BTC as hedges against inflation.
Both stocks and cryptocurrencies dropped swiftly toward the end of the week as news of a potential “second wave” of the Covid-19 pandemic emerged. Bitcoin was able to briefly take back the psychologically important resistance level of $10,000 before reversing. BTC has now rallied and failed at the $10,000 zone the past four visits.
This Week’s Topics
- CryptoCompare data shows that crypto derivatives trading volume has hit an all-time high.
- BTC mining difficulty fell 9% since the beginning of the year.
Next Week’s Market Forecast
Now that the Bitcoin halving occurred almost a month ago, investors have shrugged off concerns about the effects of mining difficulties on price. New concerns have emerged, however. Both equity markets and cryptocurrencies fell hard on Friday in concert as the negative news about the number of new Corona Virus hospitalizations dampened the mood. Is the “second wave” coming?
Into next week investors will keep a close eye on the number of hospitalizations both in the U.S. and around the globe. For now, Bitcoin (BTC) remains range-bound. BTC has ping-ponged between $10,000 and $9,000 since the beginning of May. To gain momentum, a decisive break one way or another is likely necessary.
Altcoins showed similar action to BTC. Bitcoin Cash (BCH) and Ethereum (ETH) were able to break above multi-month resistance following the Federal Reserve meeting. Both reversed.