Interest rates, government intervention and flight to safe haven. It’s the same cycle over and over. However, in the midst of all this is the need for investors to be assured of the future. Confidence in the market, especially in traditional securities market, has been said to be vital as it underpins the global economy.

FED and the REPO Markets

In recent days though, things have not been that rosy. From the FED printing billions of dollars and injecting them in the Repo market in a bid to keep interbank lending rates below the Fed’s fund rate and the market being wobbly like never before is an indicator of fragility.

Apparently, the traditional market is addicted to capital injection and quantitative easing where central banks purchase assets for the sake of liquidity. However, the more they ease, the higher the inflation gets and that is where the real pinch lies.

Rush to Safe Havens-Gold and Bitcoin

Loss of value in government-issued fiat currencies. Expectedly, and cognizant of this, savvy investors are flocking into safe havens like gold and now Bitcoin. The former is trusted, but it is the flow to BTC that is gaining traction.

In recent days, data from LocalBitcoins, a peer-to-peer trading facility for Bitcoin, pointed to a sharp spike of BTC purchases in Hong Kong. Although reports on the ground is be mixed—conflicting reports that indeed there is no demand for BTC as painted by mainstream media, data underlines the importance and value of BTC during periods of uncertainty.

BTC/USD Price Analysis

Conspicuous, recent BTC/USD price moves is largely defined by the bear candlestick of Sep 24. Breaking below the main support-now resistance-, at $9,000, sellers have the upper hand. Moving on, the best course of action for bulls is patience.

In that case, what is required is a satisfactorily reversal of Sep 24 losses at the back of high trading volumes preferably exceeding those of Sep 24 of $34k according to data from Coinbase.

Since prices are in a downtrend and despite days of consolidation, bulls are yet to reverse losses of Sep 24. As such, the best course of action at the moment would be to short BTC on every pull back with fitting stop loss order at around $8,800. Bear targets would be around $7,500-the immediate support.

On the other hand, any uptick-with conditions as aforementioned, above $9,000 may see BTC prices float higher to $11,000 and even $14,000 in the immediate term.

Chart courtesy of Coinalyze

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