Bitcoin breaks out of the range as Fed's Jefferson comments reduce rate hike expectations further

<p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">FUNDAMENTAL OVERVIEW</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">Bitcoin has been consolidating since last Wednesday, but the dovish <a href="https://investinglive.com/central-banks/fed-s-williams-one-more-hike-likely-this-year-is-likely-enough/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Fed’s Williams</a> and <a href="https://investinglive.com/central-banks/fed-s-jefferson-weighing-more-data-will-allow-the-fed-to-make-a-better-call-on-rates/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Fed’s Jefferson</a> comments this week provided support for the cryptocurrency despite the ongoing US-Iran stalemate. </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">Williams is the President of the New York Fed, while Jefferson is the Fed Vice Chair. These two are part of the so-called troika which also included the Fed Chair. </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">Their comments are generally the most influential ones, and they triggered a dovish repricing that took October rate hike probabilities from 70% to roughly 25% now. </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">Bitcoin has also extended the gains this morning following a key technical breakout. Looking ahead, the focus will remain on US-Iran developments and the Fed. </p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: normal; font-size: 15px;">A breakthrough in negotiations could provide further support for Bitcoin as expectations for aggressive Fed tightening will likely get pared back further. Conversely, a prolonged stalemate or renewed escalation would likely limit the upside unless the Fed keeps being more dovish than market’s expectations.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">Today, we also have the US NFP report. Given Fed’s Williams and Fed’s Jefferson comments, we will likely need a blockbuster report, with data beating expectations across the board, to raise the probabilities for an October hike again. Such an outcome could weigh on Bitcoin in the short-term on another hawkish repricing.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">In-line or weaker than expected data, on the other hand, will likely provide support to extend the recent rally.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;"> </p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – DAILY TIMEFRAME</p><p></p><p>On the daily chart, we can see that <a href="https://www.tradingview.com/symbols/BITCOIN/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Bitcoin</a>bounced from the broken resistance-turned-support zone around the 82,500 level. If we get another pullback into the support and the upward trendline, we can expect the buyers to step in, with a defined risk below the trendline, to position for a rally into the 98,000 level. The sellers, on the other hand, will want to see the price breaking below the trendline to pile in for a drop into the 76,000 support next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME</p><p></p><p>On the 4 hour chart, we can see the price broke out of the 82,500 and 85,000 range this morning. If we get a pullback, we can expect the buyers to step in around the 85,000 support, with a defined risk below it, to keep pushing into new highs. The sellers, on the other hand, will want to see the price falling back below the support to extend the pullback into the major upward trendline next.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">BITCOIN TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME</p><p></p><p>On the 1 hour chart, there’s not much we can add here as the buyers will have a better risk to reward setup around the 85,000 support or the major trendline to keep targeting new highs, while the sellers will need downside breaks to position for new lows. The red lines define the <a href="https://investinglive.com/Education/trading-tip-know-the-average-daily-range-adr-20220207/" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">average daily range</a> for today.</p><p class="MsoNormal" style="margin: 0 0 11px; line-height: 106%; font-family: Aptos, sans-serif; font-size: 15px;">UPCOMING CATALYSTS</p><p class="MsoNormal" style="margin: 0 0 11px; font-family: Aptos, sans-serif; line-height: 103%; font-size: 15px;"><a href="https://investinglive.com/EconomicCalendar" rel="follow" style="color: rgba(70, 120, 134, 1); text-decoration: underline;">Today</a>we conclude the week with the US NFP report.</p> This article was written by Giuseppe Dellamotta at investinglive.com.