Bitcoin Price Forecast: Bitcoin Gives Up Weekend Gains, Indicating Potential Bull Trap as Momentum Fades
Bitcoin (BTC) starts the week on a weaker note, declining by more than 3% to around $103,000 at the time of writing this report on Monday after briefly rising over the weekend. The price movement has raised concerns among traders about a potential bull trap, especially with early signs of exhaustion showing in momentum indicators. Despite the continued positive inflows from companies and institutions in the form of Bitcoin exchange-traded funds (ETFs) and accumulation by Meta Planet, bearish sentiment appears to be gaining traction in the short term.
What does the Federal Reserve do, and how does it affect the US dollar?
Monetary policy in the United States is formed by the Federal Reserve (Fed). The Federal Reserve (Fed) has two main tasks: achieving price stability and promoting full employment. The primary tool to achieve these goals is adjusting interest rates. When prices rise too quickly and inflation is above the Federal Reserve's (Fed) target of 2%, it raises interest rates, which leads to increased borrowing costs throughout the economy. This results in a stronger USD because it makes the United States a more attractive place for international investors to keep their money. When inflation drops below 2% or when the unemployment rate is very high, the Federal Reserve (Fed) may lower interest rates to encourage borrowing, which puts pressure on the dollar.
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Technical Analysis of Gold Prices: Breakdown Downward, Weekly Loss Inevitable
Gold prices are facing headwinds and tailwinds, more than can be summarized, pushing the precious metal in all directions. The landscape is no longer easy, at least for now, and gold is not moving in one direction as it was at the beginning of the year. Ultimately, the "last prevailing winds" will determine the direction gold will take. Nevertheless, investors should continue to monitor the $3160 area to assess whether the rise in gold is still viable and sound.
"The continued rise in open interest in gold contracts on the COMEX may indicate some modest short buying during past sessions, but even so, the overall volume of these selling flows remains limited, suggesting that prices are simply holding on to modest retail flows until they find the first offer."
What is the concept of trading? Most of us trade continuously in our daily lives without realizing that we are doing so. For example, everything we buy from stores is a form of trading money in exchange for the goods or services we purchase. Therefore, the concept of trading can be simplified in its definition as an exchange of one thing for another. Usually, when the term trading is used, we immediately understand that a commodity or something has been exchanged for money, or in other words, buying something from one person and selling it to another.
Trading primarily depends on supply and demand in general, as the value of what a person or a group of people wants to buy changes depending on the change in supply.
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