With the Ark 21Shares Bitcoin exchange-traded fund application pushed back it's probably time to take a look at the economy, as it remains the next potential risk to Bitcoin.
This risk comes ahead of the next set of ETF application decisions in September, which analysts appear more positive on.
For me, I think I am more optimistic toward heavyweight applications such as BlackRock (BLK) and Fidelity Investments.
The point is, even though we might have some good news about these decisions in the not-too-distant future, a downside correction may come.
The main risk for crypto as I see it is stocks falling causing risk-off sentiment.
Apple, a strong bellwether for the global economy recently reported dwindling iPhone sales.
Also, the overall price action for tech stocks has changed recently, due to the heightened risk of the global economy turning south and falling into a recession.
BofA Global Research now sees a soft landing with no US recession.
BofA also notes that deposit buffers in banks provided ballast to consumer spending and analysis around hypothetical forward-looking scenarios suggests that they will continue to do so for some time, which is encouraging.
Another risk is the Fed and inflation. The Fed is in a data-dependent policy-setting mode, with the release of the FOMC meeting minutes from the July meeting expected to show many surprises.
However, traders will be looking for any commentary on how the Fed assesses growth dynamics; given that inflation is slowly inching back down towards target, many expect the Fed to pivot policy and eventually begin cutting rates to support the economy.
Overall, the movement of stocks and the data up to the next Fed meeting becomes the downside risks to crypto prices ahead of the next set of ETF decisions.
Looking at the technicals for Bitcoin right now it is actually quite easy to lay out the foundation of the next price moves based upon the daily price closes.
Basically, multi-day strength above $30,000 level tips the balance of power back toward the bulls, and multi-day weakness below $29,000 and bears will likely take over.
The $30,000 level is more or less where the monthly pivot point sits, plus it is a massive psychological level.
Also, it's the point at which Parabolic SAR flips buy on the daily time frame. Multi-day stabilization above that level is key now.
Upside targets then become $31,200 and $31,800. Remember $31,200, it was a huge upside level that BTC couldn't close the daily candle above before it collapsed, shortly after hitting the $31,800 level.
To the downside, the $28,500 to $28,200 area become the bearish targets if we do see weakness under $29,000. I happen to think a test of this area could be a super-buying opportunity.
Although I'd much prefer Bitcoin doesn't break $29,000 again and go on another white-knuckle ride we do need to mentally prepare ourselves for that possibility. Especially if your already long BTC.
