FX.co ★ Cryptocurrency Trading Recommendations – August 13 (U.S. Session)

Bitcoin decided not to put off until tomorrow what can be done today and, together with Ether, continued to decline ahead of the release of the U.S. Producer Price Index. At the time of writing, the asset is trading around $63,600, while Ether is holding below $1,878; both remain on a downward trajectory in recent days.

More significant was the market's reaction to yesterday's inflation data. The July Consumer Price Index came in at 3.4% year-on-year versus 3.5% in June, while the core reading slowed to 2.5%. Monthly increases were a modest 0.1% and 0.2%, respectively, meaning the data came in as soft as the market had expected. However, Bitcoin reacted to the news with an almost imperceptible move. This indifference to positive data directly confirms the warning previously highlighted in a Glassnode report that a weak reaction to good news is itself a worrying signal.

Today's Producer Price Index report has greater potential to trigger an actual market move than yesterday's CPI, as the consensus for PPI is less firmly established. Technically, Bitcoin is approaching the release at an unfavorable point on the daily chart, trading just above the nearest significant support level.

The past few months have shown that PPI has had much greater downward or upward impact than CPI in the current cycle. In May, an unexpectedly hot Producer Price Index report sent Bitcoin below $80,000 amid concerns that rising oil prices and risks surrounding Iran would fuel a new wave of inflation. The exact opposite scenario unfolded in July, when a soft PPI reading of 5.5% versus the expected 6.2% sent Bitcoin back above $65,000, while Ether broke above $1,900 for the first time in 43 days, liquidating nearly $100 million in short positions in just half an hour.

Given that oil prices remain elevated amid continued tensions surrounding the Strait of Hormuz, while the market is trading at historically low spot volumes, according to Glassnode, today's report could trigger a move disproportionately large relative to the figures themselves, regardless of which direction the surprise comes from. A weak PPI will most likely reproduce July's short squeeze and return the asset to a test of resistance around $65,000, while a hot report risks triggering a repeat of May's decline.

Bitcoin

Buying Scenario

Scenario #1: I will buy Bitcoin today when the entry point is reached around $63,700, with a target of $64,100. Around $64,100, I will close the long position and sell immediately on a rebound. Before buying on a breakout, it is necessary to make sure that the 50-day moving average is below the current price and that the Awesome Oscillator is above zero.

Scenario #2: Bitcoin can be bought from the lower boundary at $63,500 if there is no market reaction to a breakout below it, with a return toward $63,700 and $64,100.

Selling Scenario

Scenario #1: I will sell Bitcoin today when the entry point is reached around $63,500, with a target of $63,100. Around $63,100, I will close the short position and buy immediately on a rebound. Before selling on a breakout, it is necessary to make sure that the 50-day moving average is above the current price and that the Awesome Oscillator is below zero.

Scenario #2: Bitcoin can be sold from the upper boundary at $63,700 if there is no market reaction to a breakout above it, with a return toward $63,500 and $63,100.

Ethereum

Buying Scenario

Scenario #1: I will buy Ether today when the entry point is reached around $1,886, with a target of $1,907. Around $1,907, I will close the long position and sell immediately on a rebound. Before buying on a breakout, it is necessary to make sure that the 50-day moving average is below the current price and that the Awesome Oscillator is above zero.

Scenario #2: Ether can be bought from the lower boundary at $1,875 if there is no market reaction to a breakout below it, with a return toward $1,886 and $1,907.

Selling Scenario

Scenario #1: I will sell Ether today when the entry point is reached around $1,875, with a target of $1,861. Around $1,861, I will close the short position and buy immediately on a rebound. Before selling on a breakout, it is necessary to make sure that the 50-day moving average is above the current price and that the Awesome Oscillator is below zero.

Scenario #2: Ether can be sold from the upper boundary at $1,886 if there is no market reaction to a breakout above it, with a return toward $1,875 and $1,861.