Cryptos benefit from US Equities decline

BTCUSD, H1 & Daily

The dollar bloc currencies have been under-performing amid the risk-off backdrop in global asset markets. Trump’s trade warring has rattled global stock markets, in turn putting higher beta assets and currencies under the cosh. Emerging markets currencies are already under notable pressure since last week’s hawkish turn by the Fed, while they have dropped to new lows today.

Cryptocurrencie’s performance however presenting an inverse picture from the rest of the US Dollar crosses. More precisely, Bitcoin has traded quite higher at $6,703.00 since yesterday night, as Ethereum picked up at $5,18.20. Trump’s threat to slap further tariffs worth $200 bln on Chinese imports seems that might cause the increase of the demand for BTCUSD and therefore price rose by nearly $320.00. 

In general, crypto-currencies tend affected by global equities performance but also react on major political and geopolitical events. Hence as trade tensions grow and US equity index futures under-perform, Crypto-currencies benefit. Despite politics, the rally of Bitcoin today might be also affected by the decision of the New York Department of Financial Services to provde BitLicense to the digital payment company Square. This might added further positive intra-day momentum to the coin.

So far today, Crypto-currency markets facing consolidation near 6-day highs, as CME has not open yet and hence volume values are low. This recent attempt to spike higher and break the downtrend identify since May 3, rise some upside hopes for for Bitcoin and i general cryptos. This consider to be too early to be said, since pair remains in general under pressure and the particular shift higher could just be a slight correction of last month’s decline.

As the 1-hour chart presents, BTCUSD holds above Pivot Point level at $6,627.00 for 16 consecutive sessions, after failing to break of the 23.6% Fibonacci retracement level set since May 3. The momentum indicators remaining positive but pointing that intra-day positive momentum has faded a bit. The RSI slipped lower and it is currently at 65, while MACD remains in the positive area but below its signal line. The long-term charts however, remain strongly in the negative scenario.

In short-term, only a break above recent up fractals at $6,750.00 could boost the asset higher towards 200-period EMA at $6,785.00 and R1 at $6,861.00. Support comes at $6,600.00.

In long-term, only a retest of the gap seen in June 7 and therefore a break above $6,900.00 – $7,000.00 (i.e. 23.6% Fib. level and R2), could imply that BTC is ready to move to the upside. If BTCUSD returns to week’s low at $6,400.00, this could alert that downwards momentum has been reinforced.