The latest business cycle totals have indicated that the likelihood of an economic recession in the West has increased and so the likelihood of a Federal Reserve (FED) pivot this summer has increased. What can be the impact of this fundamental combination on the crypto market as Ether (ETH) seems to be trying to outperform Bitcoin (BTC).
The likelihood of an economic recession in the United States is revised upward
The stock markets are currently facing a tough dilemma, especially “risky” financial assets such as the stock market and the crypto market. So what is it?
The latest US economic data updates, including Purchasing Managers’ Indexes (PMI) from the Institute for Supply Management (ISM), have boosted the likelihood of a 12-month recession on the horizon for the largest economy in the world.
The manufacturing sector, subject to new bank and bond financing conditions (the powerful upward cycle in interest rates that has been developing for 15 months), seems to be set for contraction in its activity and a reduction in its potential profits.
Taken alone, this is a fundamental assumption downward factor for risky assets on the stock market. But things are not so simple, because this increase in the probability of a decline in GDP in the United States (and in the West in general) increases another probability, that of seeing the United States Federal Reserve reverse monetary steam. and engage again in a downward cycle of their interest rates to prevent the unemployment rate from rising dramaticallya systematic phenomenon in a real economic recession.
However, this potential monetary inflection is a bullish recovery factor for the equity market and bitcoin price. Ultimately, which of these two factors will prevail over the other? I can answer you as follows: the one who knows the certain answer to the above question will be able to predict the medium-term trend (the next months) of the price of cryptos.
Meanwhile, Bitcoin (BTC) price still faces major technical resistance at $29,000, the latest strong chart argument for permabears. because if this resistance is breached, then the BTC will go to a minimum of 35,000 dollars.
On the other hand, it is quite possible that the market will affect a movement back (pullback) towards the new strong support at 25,300 dollars, before the path of the rise resumes.
As for the invalidation of the increase, the breakout of $25,000 would end the crypto market’s yearly retracement. The technical selection will be made on the basis of fundamental data, such as the publication of the US NFP report on Friday April 7 at 2:30 pm
Chart combining weekly Japanese candles (left) of bitcoin price with daily Japanese candles (right)
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Ether Could Not Start Doing Better Than Bitcoin As Shanghai Update Looms
The Shanghai Ethereum update is due on April 12th and it seems the price of Ether is in the process of starting a phase of outperforming the price of bitcoin. Technical analysis applied to dominance curves shows that bitcoin dominance is currently trading under resistance while ETH dominance seems to be finally waking up.
This relative outperformance of ETH over BTC may continue for the next few days.
A chart comparing Bitcoin dominance to Ehereum dominance
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Vincent Ganne is a market strategist, technical analyst, stock market trainer and BFM Business speaker. With long experience in the field of analysis, he offers a global approach to the financial markets. Both from a macroeconomic and microeconomic point of view. Vincent Ganne also uses many aspects of chart analysis with the aim of predicting trends in financial assets in the medium and long term.
Vincent Gane
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