Fed's Williams support cannot push Bitcoin out of range as US-Iran talks dominate

FUNDAMENTAL OVERVIEW

Since last Wednesday, Bitcoin has been trading sideways, with ongoing US-Iran frictions keeping gains in check. Renewed optimism over the negotiations has nonetheless improved the backdrop somewhat, easing concerns that the situation might escalate.

Talks continue between the US and Iran over Tehran's proposal to reopen the Strait of Hormuz within seven days under certain conditions, with the aim of reaching an agreement. According to the latest reports, the disagreement now centres on the sequencing and implementation of the measures rather than the substance of the proposal itself.

Yesterday also brought some support for Bitcoin from Fed's Williams. He indicated there was no urgency about raising rates after September's hike, adding that another move would likely be appropriate should the economy keep performing as expected. The probability of an October hike slipped from around 70% to roughly 45% in the dovish repricing that followed.

Going forward, attention will stay on US-Iran developments. If negotiations produce a breakthrough, Bitcoin could get more support, with expectations for aggressive Fed tightening likely to be trimmed. A long-running deadlock or renewed escalation, by contrast, would probably leave risk sentiment under pressure and cap Bitcoin's gains.

BITCOIN TECHNICAL ANALYSIS – DAILY TIMEFRAME

On the daily timeframe, Bitcoin is consolidating at the former resistance-turned-support zone around 82,500. Buyers have a more attractive risk-reward setup at the upward trendline if they aim to drive price to new highs, while sellers, meanwhile, need a break below the zone to stretch the decline toward 76,000 support.

BITCOIN TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME

The range between 82,500 support and 85,000 resistance shows up more clearly on the 4-hour timeframe. Buyers are likely to keep stepping in near the support, with risk defined underneath it, and continue targeting a rally to 90,000. Sellers, for their part, will be looking for a break lower that would deepen the pullback to the major trendline.

BITCOIN TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME

The 1-hour timeframe does not add much: participants will probably keep working the range, buying at support and selling at resistance, until a breakout happens on either side.

UPCOMING CATALYSTS

Today's calendar includes the US ADP and the US PCE price index. The US ISM Manufacturing PMI and the latest US Jobless Claims figures arrive tomorrow. Friday closes out the week with the US NFP report. Attention, however, will stay fixed on US-Iran developments.