Bitcoin is on the rise to start the week on Monday, recovering above $22,000, while Ethereum remains steady. Over a week, however, the two most important cryptocurrencies on the market posted an identical performance (+12%), at the start of what could have been a lively week.
Remember that Bitcoin is coming back from a long time, the cryptocurrency is parked low at $18,540 at the beginning of last week, the lowest level in about a month and a half. However, the cryptocurrency then began a strong rally, which corresponds to a certain return of optimism that was also visible on the stock exchanges.
The story is the same on Monday morning, with increased optimism in Ukraine’s progress in the war against Russia, giving hope that the war will end faster than expected. The price of Bitcoin, like Ethereum and most other cryptocurrencies, is at an advantage today.
The fate of Bitcoin and Ethereum will depend heavily on US inflation this week
However, the warning will remain in order, due to a key event expected tomorrow, which could affect cryptocurrencies like other global markets.
Traders are indeed waiting anxiously for the release of inflation data from the United States, with the CPI for August tomorrow at 2: 30 pm, data that could have a significant impact on expectations for the next Reserve meeting.
Indeed, stronger-than-expected inflation could bolster prospects for continued aggressive monetary tightening, thus weighing on Bitcoin and other cryptocurrencies.
Conversely, weaker-than-expected inflation would reduce pressure on the Fed, and allow it to consider a rate hike slowdown, which would have bullish consequences for Bitcoin, Ethereum, and other cryptocurrencies.
Currently, money markets are pricing in an almost 90% chance that the Fed will raise rates by another 0.75% at its next meeting on September 21st.
A decline in this probability, in favor of a more modest 0.5% rise after tomorrow’s US CPI could be a big bullish catalyst for Bitcoin and Ethereum.
Target $25,000 if Bitcoin crosses this threshold
Graphically, Bitcoin’s rise from this morning clearly improves its graphical profile. From now on, the $22,000 threshold found again this morning is the first possible support to consider.
Then, the next possible support is the $20,700/21,000 area, before the major psychological level of $20,000.
On the other side, the $22,500 area, which has acted as support several times in recent months, will be the first potential obstacle. Then the way will be clear to the key threshold of $25,000.
However, it should be noted that while a return above $25,000 can have a significant psychological impact, Bitcoin’s daily bearish background trend will only begin to be reversed if the trend seen since 2021 and currently sits around $27,000. .
The central threshold of $2000 in sight on Ethereum?
For the price of Ethereum, the second most important cryptocurrency on the market, the $1800 threshold is an immediate resistance, before $1900. That is exactly where the big psychological threshold of $2000 could be targeted.
However, to challenge the underlying bearish trend of ETH in daily data, it will be necessary to cross a trend line seen from the November 2021 high which is currently located around $2200.
In summary, both Bitcoin and Ethereum are showing an encouraging start to the week that suggests key objectives could be reached as early as this week, but chart confirmations are still needed at this point.
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