On Monday, the People's Bank of China (PBoC) kept the Loan Prime Rate (LPR) unchanged, which surprised the market. At the same time, U.S. President Trump unexpectedly announced new regulations for H-1B visas, escalating geopolitical tensions and putting pressure on U.S. stock futures. Despite favourable information from the Fed regarding interest rate cuts, market sentiment has become cautious due to global policy uncertainties. In this complex macro backdrop, Bitcoin has failed to maintain its rise, and technical analysis shows that its price is pulling back towards key support levels.
The People's Bank of China maintains interest rates, new visa regulations signed by Trump impact the tech industry
On Monday (September 22), despite recent economic data from China showing rising unemployment, weak external demand, and weakening domestic consumption, the People's Bank of China (PBoC) still kept the one-year and five-year Loan Prime Rates (LPR) unchanged at 3% and 3.5%, respectively. There was an opportunity to lower interest rates to stimulate consumption and offset the expected impact of U.S. tariffs on the economy, and the market began to prepare for potential turmoil.
At the same time, US President Trump surprised the market by announcing a plan to impose an annual fee of $100,000 for each H-1B visa for high-skilled workers. This move could impact the technology industry, which heavily relies on talent from China and India. The annual visa fee of up to $100,000 will increase operating costs and compress profit margins, potentially putting pressure on stock prices. This announcement came after reports of a positive call with Chinese leaders last Friday (September 19), which could escalate tensions between the US and China before the end of the 90-day tariff truce. A full-blown trade war would severely affect market sentiment and US stock index futures.
The US dollar rises against the Japanese yen, providing a buffer for the market.
Despite the pressure on market sentiment from the Chinese central bank and U.S. foreign policy, the weakening of the yen (USD/JPY rising) provided a buffer for the decline in U.S. stock futures. In Monday morning trading, USD/JPY rose 0.26% to 148.339, continuing its rebound from last week's low of 145.481. The softening of the yen stimulated demand for Japanese stocks, pushing the Nikkei 225 index up by 1.55%.
Traders need to closely monitor the USD/JPY and Nikkei 225 index, as their sharp decline may signal the risk of unwinding yen carry trades. Last Friday, the Bank of Japan kept the interest rate unchanged at 0.5%, but two policymakers expressed dissent regarding this rate decision, sparking market speculation about a rate hike in October. If the Bank of Japan turns hawkish and combines this with the Fed's interest rate cuts in the fourth quarter, it could intensify demand for the yen. The drop in USD/JPY may trigger margin calls, forcing investors to unwind leveraged investments in US stocks to repay cheap yen debt, leading to the unwinding of yen carry trades.
U.S. stock futures fell ahead of speeches from Fed officials.
In Monday morning trading, U.S. stock index futures fell back. The Dow Jones e-mini dropped 81 points, the Nasdaq 100 e-mini fell 18 points, and the S&P 500 e-mini decreased by 7 points. Despite early losses, U.S. stock futures remained above the 50-day and 200-day exponential moving averages (EMA), reaffirming the short-term bullish bias. However, this bullish bias depends on the outlook for the Bank of Japan's policy, U.S. foreign policy, upcoming U.S. economic data, and guidance from the Fed.
This week, following the Fed's interest rate cut last week, Fed officials will become the focus of the market. Fed Vice Chairman John Williams, along with Federal Open Market Committee (FOMC) members Beth Hammack, Stephen Miran, and Alberto Musalem, will all give speeches. If they clearly support further easing of monetary policy in October and December, it could boost demand for risk assets. However, if they call for delaying further policy easing until December, it could put pressure on market sentiment. With Fed Chair Powell and several FOMC members scheduled to speak this week, it will be a crucial week for U.S. stock futures.
Dow Jones
- Resistance level: record high of 46,738 on September 19, followed by 47,000.
- support level: 46,500, 46,000, then the 50-day EMA (45,155).
Nasdaq 100
- Resistance level: Record high of 24,888 and 25,000 reached on September 19.
- support level: 24,500, 24,000 and 50-day EMA (23,576).
Standard & Poor's 500
- Resistance level: The record high of 6,732 set on September 19, followed by 7,000.
- support level: 6,500 and 50-day EMA (6,448).
In this macro background, Bitcoin price undergoes a technical pullback.
Amid multiple uncertainties in the global market, the cryptocurrency market has not been spared either. Bitcoin's price has failed to maintain its upward momentum above $117,750 and is currently declining, potentially testing the support level of $113,200.
Bitcoin price has started a new round of decline below $115,500. The price is currently trading below $115,500 and the 100-hour simple moving average. A bearish connecting trend line has formed on the hourly chart, with a resistance level at $115,200. If the currency pair can break through the $116,000 area, it may begin another round of rise.
Bitcoin price has fallen again.
Bitcoin price started a new rise above the 116,500 USD area and successfully climbed above the resistance levels of 116,800 USD and 117,500 USD, but then the bears appeared. After the price formed a high at 117,920 USD, it began a new decline. The price fell below the levels of 116,500 USD and 115,500 USD, and accelerated its decline below 115,000 USD. The price formed a low at 114,237 USD and is currently consolidating below the 23.6% Fibonacci retracement level, which is the drop from the recent swing high of 117,920 USD to the low of 114,237 USD.
Bitcoin is currently trading below $115,500 and the 100-hour simple moving average. Additionally, a bearish trend line has formed on the BTC/USD hourly chart, with resistance at $115,200. Immediate resistance on the upside is around $115,000. The first key resistance level is near $115,250. The next resistance level could be $116,000 or the 50% Fibonacci retracement level. If the closing price breaks above the resistance at $116,000, the price may rise further and test the resistance at $116,500, and may even challenge $116,800 and $117,250.
BTC price Technical Analysis
(Source: TradingView)
If Bitcoin fails to break through the resistance zone of $116,000, it may begin a new round of decline. The immediate support level is around $114,250. The first major support level is around $113,500. The next support level is in the $113,250 area. Any further losses could push the price towards the $112,500 support level in the short term. The main support level is at $110,500, and if it falls below this, BTC may experience a significant drop.
Technical Indicators:
- Hourly MACD: MACD is accelerating in the bearish zone.
- Hourly RSI: The RSI for BTC/USD is now below the 50 level.
- Main support levels: 114,250 dollars, followed by 113,250 dollars.
- Major resistance levels: $115,000 and $116,000.
Conclusion
In the complex and turbulent global financial market, the price trends of US stock futures and Bitcoin reflect investors' concerns about geopolitical issues, monetary policy, and economic data. The PBoC's policy of holding steady and Trump's unexpected actions have brought new uncertainties to the market. Meanwhile, the speeches of Fed officials and the upcoming economic data will be key in guiding the market direction. In this game of multiple factors, both traditional finance and the cryptocurrency market face a challenging period, and their future trends will depend on the ultimate direction of these macro forces.
