Markets are on edge this week as investors await key Federal Reserve speeches and the U.S. core PCE inflation report, both likely to influence volatility across crypto and traditional markets.
Dollar Index (DXY) Signals Potential Upswing
Following the Fed’s first interest rate cut since December, the U.S. dollar index (DXY) closed the week forming a dragonfly doji on the weekly chart—a classic bullish reversal pattern. Despite the dovish rate decision, the DXY briefly fell below July’s 96.37 low before rebounding to 97.65, buoyed by resilient U.S. Treasury yields.
The dragonfly doji forms when the open, high, and close prices converge, with a long lower shadow reflecting a rapid recovery from intraday declines. Its appearance after a downtrend and at a critical support level often indicates an impending bullish shift. Dollar strength traditionally pressures risk assets, including crypto, setting the tone for the coming week.
Bitcoin Faces Key Resistance
Bitcoin (BTC) mirrored this indecision, forming a weekly Doji candle at a major resistance level defined by trendlines from the 2017 and 2021 bull markets. This pattern points to hesitation among bulls and potential selling pressure at this long-term hurdle.
Daily charts show BTC flirting with a drop below the Ichimoku cloud, having breached the Sept. 1 trendline—implying downside risk. Support levels include the 50-day simple moving average near $114,473 and the Sept. 1 lows around $107,300. Overcoming last week’s high of $118,000 would be key for bulls to regain momentum.
Ether Navigates Technical Pressure
Ether (ETH) trades below the lower boundary of a contracting triangle on the daily chart, signaling renewed selling dominance. Key supports lie at the Aug. 20 low of $4,062 and the psychological $4,000 mark. Bulls need to reclaim the 24-hour high of $4,458 to restore upward momentum.
XRP MACD Turns Bearish
XRP remains under pressure. Despite the U.S. XRP ETF debut, the weekly MACD has flipped bearish, signaling renewed downside bias. Price action points to a retreat toward the upper boundary of a descending triangle on the daily chart. Last week’s tentative breakout failed to spark sustained buying, leaving traders cautious.
Focus on Fed Speeches and PCE Data
Investors are closely watching speeches from Fed Chair Jerome Powell and other officials for guidance on interest rates. While last week’s cut signaled further easing, Powell emphasized a data-dependent approach.
Fed dissenting voice Stephen Miran, who favored a larger 50-basis-point cut, will also speak, adding another layer of market uncertainty.
The week wraps up with the U.S. core PCE index, the Fed’s preferred inflation gauge. Analysts expect a 2.7% year-on-year rise, with core PCE at 2.9% in August—a modest uptick from July. These numbers will be critical in shaping expectations for future monetary policy.
