Market Update by Solidecn.com

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Bitcoin

Bitcoin has successfully breached the $28,000 threshold. This significant level had previously maintained Bitcoin’s price within a range of $28,000 to $25,000 since mid-August 2023.



Upon examining the BTCUSD 4-hour chart, it’s evident that Bitcoin, often referred to as ‘digital gold’, is trading within a bullish channel. However, the Relative Strength Index (RSI) indicator is currently in the overbought zone. The critical level that sustains BTCUSD’s bullish trend is $27,952. As long as the price remains above this level, Bitcoin is likely to trade above the median line of the bullish channel. Given that the RSI is in the overbought territory, a minor decline to the R1 level is anticipated. This level presents a substantial supply zone for BTCUSD bulls.



If the R1 level is breached, the next bearish target for the bulls would be the $27,237 pivot point, followed by the lower boundary of the bullish channel.

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GBPUSD

The British Pound (GBP) against the US Dollar (USD) is showing a decline in the European market on Tuesday. This is undoing some of the 0.65% increase we saw on Monday. The reason for this decline is weaker than expected growth in UK salaries, which is causing concern for those who want another rate hike from the Bank of England (BoE).

Everyone is waiting for the UK's inflation report for September, which will be released on Wednesday. The forecast is 6.5% year-on-year, compared to 6.7% in August, and the core is forecasted at 6.0% compared to 6.2% in August. If the September figure meets or falls below expectations, it will further discourage a hawkish view on rates and keep the pound on the defensive.



The recent drop in value is putting pressure on the initial support level at 1.2141 (the upward trend line from the 1.2037 low), before a crucial point at 1.2122 (Friday's low). If it falls below this, it could signal further decline and risk retesting the October 4 low at 1.2037.

The converged 10/20 day moving averages at 1.2200/13 are a crucial barrier. If it breaks through this level and stays above it, it could sideline immediate downside threats and pave the way for a new recovery.

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EURJPY

At the time of this EURJPY market analysis, the EURJPY is navigating a bullish channel, with the RSI indicator maintaining a position above the 50 level. On October 3, the pair managed to stay above the Ichimoku cloud, resulting in the continuation of the EURJPY uptrend. The primary hurdle for the EURJPY bulls is at the 158.64 mark.



For the bullish trend to persist, it’s crucial for the EURJPY bulls to achieve a close above the 158.64 level. Should this occur, the next target for this currency pair would be projected towards the 162.0 area.

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EURUSD

The European currency is stable between 1.05-1.06 levels due to lack of new data. Yesterday, there were no surprises due to the absence of significant economic data. The focus remains on the Middle East, but there are no signs of major escalation, bringing stability to international stock markets and reducing the need for dollar purchases.

It's too early to predict if de-escalation is likely. The European currency is under pressure due to ongoing concerns. Today's agenda includes U.S. retail sales data, which may confirm the U.S. economy's stronger momentum compared to Europe.




After a two-month downward trend, the European currency shows signs of stability. Unless there's a major market shock, it's likely to remain stable this month. As the market direction is unclear, it's best to wait and see. I'm considering buying more European currency after significant dips and new lows.

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SOLUSD Analysis

Amidst the ETF rumors, Solana’s price experienced a significant surge, peaking at $27, a trend that was mirrored by other cryptocurrencies. This spike in SOLUSD’s price resulted in it reaching the $24 - $27 resistance zone, causing both the RSI indicator and Stochastic oscillator to enter the overbought region.



Technical indicators suggest an impending market correction. With SOLUSD breaking the upper band of the Bollinger Bands, it’s anticipated that Solana will correct its recent gains and potentially decline to $22.4, aligning with the middle band of the Bollinger Bands.



This scenario is contingent on SOLUSD closing below the middle line of the Bollinger Bands on the 1-hour chart, which is currently around $23.5. If bearish momentum is observed, we can expect SOLUSD’s bearish trend to persist, with initial targets set at $23.24, followed by the $22 pivot point.

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Bitcoin

Recently, we observed a notable event in the BTCUSD market trends. The BTCUSD broke out of the bearish channel, surpassing the $27,237 pivot with a strong bullish candle in the 4-hour chart. As of now, it’s testing the $27,952 resistance, indicating a potential shift in market dynamics.

Our BTCUSD Analysis wouldn’t be complete without examining the technical indicators. Upon scrutinizing the BTCUSD 4-hour chart, we noticed a divergence in the Relative Strength Index (RSI) indicator. Both the RSI and the stochastic oscillator are hovering in the over-bought zone. This observation is crucial as it often signals a potential reversal in market trends.



Given the current state of overbought conditions, our BTCUSD Analysis suggests a cool down in the bullish momentum. It’s likely that the bears will step in to correct the recent rise of BTCUSD. This correction phase is a common occurrence in financial markets after a significant price increase and is often seen as a healthy sign for long-term market stability.

We anticipate that BTCUSD might test the Ichimoku cloud before further rise. The Ichimoku cloud is a collection of technical indicators that show levels of support and resistance, as well as momentum and trend direction. It’s an essential tool in our BTCUSD Analysis toolkit.

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USDSEK Analysis: The Ultimate Guide to October 2023

The pair recently broke above the 10.84 resistance level, a significant milestone in its upward trajectory. This break was tested when the Stochastic oscillator signaled that the USDSEK might be overbought. However, with the RSI indicator remaining above the 50 level and far from the overbought area, it suggests a decent bid for buyers at the 10.84 support level.



To further confirm this scenario, we’ve zoomed into the USDSEK 4H chart. Despite attempts by the bulls to break out of the bearish channel, the USDSEK price has returned inside the channel. In this USDSEK analysis, we recommend traders to exercise patience at this level. Although the currency pair’s main trend is bullish in the weekly chart, it’s currently in a declining channel in the 4H chart.



If the bears manage to close below the blue bullish channel, we anticipate that the USDSEK price will decline to the middle line of the 4H bearish channel (shown in black), followed by reaching the 10.77 support level. On the other hand, if the bulls on the USDSEK manage to break out of the blue bullish channel in the 4H chart, we predict that the price of the pair would surge towards a target of 11.123.

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USDINDEX

In the wake of the escalating conflict in the Middle East, secure assets like gold and the US Dollar have seen a significant rise.

The intensifying conflict in the Middle East has led to a notable increase in the value of secure assets such as gold and the US Dollar. The situation on the Israel-Lebanon border has worsened, resulting in over 2,000 civilian casualties in the Gaza Strip. In an attempt to alleviate the situation, the US has initiated covert negotiations with Iran. However, the possibility of a direct clash between Israel and Iran, a major backer of Hamas, is causing alarm. In tandem with these US-Iran discussions, oil prices have skyrocketed due to fears of impending oil sanctions. According to Bloomberg Economists, this situation could drive oil prices up to $150, potentially pushing the global economy into a recession.



The US Dollar is maintaining its upward trajectory, driven by strong inflation figures from the US. The rising geopolitical unrest in the Middle East has also strengthened the appeal of the greenback as a preferred safe-haven asset. Although the Dollar’s overall trend is subject to potential swings, the forthcoming speech by Fed Chairman Jerome Powell is a significant event to watch.

Currently, the Dollar Index is experiencing an uptrend while it tests the resistance level. However, the MACD indicates a decrease in bullish momentum, and with the RSI at 59, it suggests that the index may undergo a technical correction as the RSI has sharply withdrawn from overbought conditions.

Resistance levels: 106.60, 107.15.
Support levels: 105.65, 104.80.

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USDJPY: Temporary Pause, but Uptrend Persists

The USDJPY rally has recently hit a pause as it lingers near the firm resistance at the psychological level of 150, not too distant from the 2022 peak of 152. Nonetheless, there is no clear indication of a reversal in the ongoing uptrend. The price action for this month, thus far, can best be described as moving sideways, with the lower boundary finding support around the 200-period moving average, near the early-October low of 147.35.




Considering that USDJPY is currently within the intervention zone observed last year, breaking through the 150.00-152.00 range could be a challenging endeavor. This challenge is further accentuated by the views of some Federal Reserve officials who have suggested that interest rates may have peaked. For a more comprehensive understanding of the fundamental outlook, refer to the article "Japanese Yen Aided by Fed Pause View, Geopolitics; USDJPY, GBPJPY, AUDJPY," which was published on October 11. On the flip side, a drop below the 147.00-147.50 range would confirm a fading of the broader upward pressure. Such a decline could potentially pave the way towards the early-September low of 144.50.

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Frax's New Product sFRAX: A Game Changer in Decentralized Finance

Frax, a decentralized finance protocol, has introduced a new product called sFRAX. This product allows holders of Frax's stablecoin, FRAX, to earn interest at a rate similar to the U.S. Federal Reserve's interest rate on reserve balances, which is currently around 5.4%. The product started with an annual percentage yield (APY) of 10%, but it will eventually match the Federal Reserve's rate.

Since its launch, over 150 users have invested more than $35 million in sFRAX. This has caused the price of Frax's governance token, FXS, to increase by 7% to $5.66, although it has since dropped slightly to $5.49.

Meanwhile, lending protocol MakerDAO has been successful in attracting interest in the U.S., investing over $2 billion in short-term bonds since February 2022 and offering a 5% savings rate on its own stablecoin, DAI. This has led to a significant increase in the value of its token, MKR, which has risen by over 168% this year.

In comparison, FXS has only increased by 32% this year. However, some people in the crypto community believe that FXS will soon catch up with MKR.