Bitcoin, BTC/USD, Market Sentiment, Australian Dollar, RBA, Technical Forecast – Talking Points

• Bitcoin prices hit hard as US stock markets tumble after traders digest FOMC
• RBA policy statement takes center stage, but APAC traders should remain cautious ahead of US MFN
• BTC/USD prices could fall to 2022 low after prices fell below key Fib level

Asia-Pacific markets look set for a bearish session to end the week after risky assets fell overnight in US and European trading sessions. Bitcoin and other cryptocurrencies joined the sell-off in stock markets, with BTC/USD falling over 9%. This drove prices to the lowest levels traded since Feb. 24.

A rising US dollar also helps drive down BTC prices. The DXY Index reversed course overnight after an initial decline in response to the Federal Reserve’s interest rate decision. The sharp drop in the British pound contributed to major weakness in the dollar index, with GBP/USD falling more than 2% to the lowest since June 2020. The Bank of England signaled a weaker outlook in its latest policy decisionwhich has punished the pound as recession fears intensify.

The risk-sensitive Australian dollar joined the risk aversion movement, sending AUD/USD down almost 2%. This wiped out much of his post-RBA gains. A sharp contraction in the Chinese services PMI reported by Caixin earlier this week is also weighing on the Australian dollar, given the trade relationship between China and Australia. This morning, the country’s AiGroup services index for April rose to 57.8 from 56.2 in March. Iron ore prices are more than 1% lower in Singapore this morning, adding further pressure on the AUD. APAC traders will be on the lookout for today’s monetary policy statement from the RBA due out at 01:30 GMT.

Japan will see the Tokyo Consumer Price Index (CPI) cross the wires this morning. Singapore will follow with S&P Global’s April Purchasing Managers Index (PMI). The Philippines’ unemployment rate and trade balance in March are also expected to decline. Traders may be cautious ahead of tonight’s US jobs report. Analysts expect the April nonfarm payrolls report to rise by 380,000, according to a Bloomberg survey.

Bitcoin Technical Forecast

Bitcoin prices may soon threaten the 2022 low from January at 32,950.72 after breaking above the 23.6% Fibonacci retracement level. The pivot’s decline began after the bulls failed to erase the decline in the 26-day exponential moving average (EMA) on Thursday’s rally. Overall, the downtrend is likely to continue, but buyers may become more confident heading into the 2022 low.

BTC/USD daily chart

Chart created with TradingView

— Written by Thomas Westwater, Analyst for DailyFX.com

To contact Thomas, use the comments section below or @FxWestwater on Twitter