Today is Labor Day in most European countries, but we are still here updating some charts due to the interesting and volatile price actions we’re seeing today. Currently, the US dollar is advancing, with the Dollar Index breaking above 106 during yesterday’s US session ahead of key economic data from the US. As you know, the Fed will release its latest decision on interest rate policy today, and there is increasing speculation that they will maintain their current stance for a longer period. This anticipation is driving the US dollar higher while stocks are declining, and cryptocurrencies are also turning to the downside.
Looking at the total market cap for cryptocurrencies, we are observing a potential breakout from the wave B triangle that we highlighted earlier. This is significant because there was only a three-wave rise from the April 13th lows, indicating a correction, ideally a wave C within a triangle. If our analysis is correct, the current thrust out of the triangle could still be representing the final leg of this correction. However, there is still room to drop even to 1.9 trillion before potential support is found. A reversal and a significant bounce back to 1.23 trillion would be necessary for a true reversal, which is crucial if you are a short-term trader.
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