Bitcoin Eyes 50,000 Key Moving Average Interrupts Rally

[MongiIG]

BITCOIN, BTC/USD, YIELD CURVE, MARKET SENTIMENT, TECHNICAL OUTLOOK - TALKING POINTS

• Bitcoin gains ground but trims losses amid rising US equities, yield curve inversion
• APAC session susceptible to prevailing risk-on tone given a light economic docket
• BTC/USD grapples with its 200-day SMA as bulls prepare to test the 50,000 level

ASIA-PACIFIC OUTLOOK

Asia-Pacific markets are set for a risk-on session after US equities rallied despite a key yield curve inversion. The would-be recession “indicator” didn’t dissuade traders from buying high-beta risk assets, with the tech-heavy Nasdaq 100 Index (NDX) rising 1.68% to its highest level since January 20. Bitcoin rose but prices failed to eclipse yesterday’s multi-month high, even with a broadly weak US Dollar.

Bitcoin’s failure to take advantage of the risk-on market atmosphere may echo signs of headway being made in negations between Ukraine and Russia. Some have speculated that the war increased cryptocurrency usage amid attempts to navigate around traditional fiat currencies, where payment processing has been heavily impacted by Western sanctions. However, given recent performance, the latest lull may no more than simple profit-taking.

Gold prices broke below the 1900 level briefly in volatile trading. The drop is likely due to some froth coming out of market-based inflation expectations. The 1-year US breakeven rate fell below 6%, indicating that bond traders see inflation easing one year out. Meanwhile, consumers’ one-year inflation expectations hit a record high of 7.9%, according to a Conference Board survey.

This morning, Japan’s February retail sales figures are due out. New Zealand’s ANZ Bank will report business confidence along with its activity outlook for March at 00:00 GMT. The New Zealand Dollar rose over 0.5% from yesterday, aided by the Greenback’s weakness. Later today, Thailand’s central bank is set to hold its benchmark interest rate steady at 0.5%, according to a Bloomberg survey.

BTC/USD TECHNICAL FORECAST

BTC/USD rose slightly from yesterday, but prices were capped at the 200-day Simple Moving Average (SMA). The 78.6% Fibonacci retracement level also appeared to provide some intraday resistance. The trend still favors more upside, with the Relative Strength Index (RSI) and MACD oscillators moving upward. A break above the 200-day SMA would put the 50,000 psychological level in focus, a level not traded at since December. Alternatively, a drop could push prices down to the 61.8% Fib level.

BTC/USD DAILY CHART

Chart created with TradingView

--- Written by Thomas Westwater, Analyst for DailyFX.com. 30th March 2022