As the cryptocurrency market gears up for another week, significant technical indicators are emerging for Bitcoin (BTC) and XRP, particularly in light of recent developments from the Federal Reserve.
Last week, the Federal Reserve made headlines by implementing its first interest rate cut since December, hinting at further easing measures in the months to come. Even with this dovish stance, the U.S. Dollar Index (DXY), which gauges the strength of the dollar against major currencies, displayed a notable dragonfly doji on its weekly chart. This specific pattern, characterized by its “T” shape, often signifies a potential reversal in trend and points toward a possible rally for the dollar.
The dragonfly doji emerges under specific conditions: prices open, reach a peak, and close nearly at parity while featuring a long lower shadow that indicates a swift decline reversed by buying interest. Following the Fed’s announcement, the DXY momentarily dipped below previous lows before stabilizing at 97.65, bolstered by ongoing strength in U.S. Treasury yields. The formation of this pattern following a downward trend signals that the dollar may be on the cusp of a bullish transformation.
For Bitcoin, current price action reflects the broader market dynamics, forming a doji candle during the week that ended on September 21. This indecisive formation appeared at a crucial resistance level defined by trendlines from notable bull markets in 2017 and 2021. The presence of this doji suggests bearish tendencies, marking a period of hesitation from buyers along with increasing selling pressure from this significant resistance. A potential dip below the Ichimoku cloud is also in play for Bitcoin, as it breaches trendline support established from September’s lows.
The immediate support level for BTC rests at $114,473, presenting its 50-day simple moving average, with further critical support near $107,300 aligning with the September lows. In order to shift the bearish sentiment, Bitcoin would need to reclaim the past week’s high of $118,000.
Ether (ETH) is also confronting technical challenges, as it hovers just beneath the lower boundary of a contracting triangle formation on its daily chart. This positioning indicates strong bearish control, with potential repercussions leading to further declines. The focus for Ether is now on the low of $4,062 reached on August 20, followed by the psychological barrier of $4,000—levels that may become pivotal if bearish momentum continues. Conversely, for the bulls, overcoming the 24-hour high of $4,458 will be crucial to restore confidence.
XRP recently attracted attention with the launch of an XRP ETF in the U.S., yet this positive news has not translated into sustained upward momentum. The MACD indicator on the weekly chart has flipped bearish, suggesting a downturn in sentiment among traders. Currently, XRP appears to be gravitating back towards the upper limit of a descending triangle on its daily chart, after a brief breakout attempt that failed to gather pace.
As the week unfolds, market participants are looking closely at scheduled speeches from Fed Chairman Jerome Powell and other officials. Their insights will likely shape market expectations regarding future interest rate changes. While last week’s rate cut opened the door to potential easing, Powell’s cautious remarks underscored his commitment to a data-driven approach.
This Friday, the release of the U.S. core Personal Consumption Expenditures (PCE) index—a primary inflation gauge for the Fed—will also capture attention, with analysts projecting an annual increase of 2.7% and a core inflation rise of 2.9%.
In conclusion, as key economic indicators and market sentiments evolve, all eyes remain on the interplay between the dollar’s strength and the future trajectory of Bitcoin and XRP.
