Money and power tie. Often, the control of the former means an express gain of the latter. That’s could explain the fragility of the market when the US Federal Reserve are about to decide on the new “route” as far as monetary policy and fund rates are concerned.

Interpreted as having a political hand, the decision of the US Fed and Jerome Powell, the MPC chair, to cut rates for the first time in a decade was interpreted as a strategic move to avert President Trump’s broaching and inquisition.

The economy might be booming, as the president says, and generating jobs, but with low interest there is risk of inflation. Inflation is consequential to fiat holders. While the stock market could spike, even register new highs, the race to safety means gold, Treasury Bills and Bitcoin may benefit from the new capital injection. As prices edge higher, fiat holders will be registering losses.

The correlation between economic jumble and a rally of Bitcoin prices is remote, but charts suggest that when there is a crisis, BTC do rise just like gold. Last week, hours after the Fed decision, BTC rose from lows of $9,500 and could blast past key resistance in coming days.

Even so, there should be a cause of concern. Correlation isn’t causation. Note that days before the US Federal Reserve decision, politicians from the US and Europe were skeptical, insisting that despite the attributes of the underlying technology, the Blockchain, cryptocurrencies in general were highly volatile, backed by “thin air” and worse, have no “intrinsic value.”

BTC/USD Price Analysis

At the time of writing, Bitcoin (BTC) is on an uptrend. Adding 8.3 percent in the last day, buyers of Q2 2019 are back in a perfect trend continuation phase. Blasting past $11,200 with decent trading volumes, prices are trading above the plan’s intermediate resistance level.

From the chart, this level is an important resistance and liquidation point doubling up as July 16 lows. Therefore, although it could turn out to be a reaction point, signaling the beginning of a rally to $18,000 or better, traders should be aware of bears.

Even so, because of today’s surge, the simple fact that prices are now trading above this level nullify the bears of July 16. Note that, for the better day of July, prices were held in a consolidation/accumulation inside this bar’s high low. Then, from an effort versus result perspective, sellers have a chance despite prices being a strong uptrend.

The main determiner for further losses was how prices would react at $9,500, the immediate support. Prices did find support this level. With prices surging above $11,200, the previous bear trade plan no longer holds and thus, traders should better wait for a dip before loading with targets at $14,000 and later $18,000 ahead of next year’s halving.

All Charts Courtesy of Trading View—Coinbase

Disclaimer: Views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk. Do your due diligence.

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