BTC Could Test $107K as XRP’s MACD Flashes Bearish Ahead of Fed and Inflation Updates

Markets are bracing for volatility this week ahead of key Federal Reserve speeches and the U.S. core PCE inflation report, which are expected to influence both crypto and traditional markets.

Dollar Index (DXY) Hints at Rebound
After the Fed delivered its first rate cut since December, the U.S. dollar index (DXY) closed last week forming a dragonfly doji on the weekly chart—a signal often associated with a potential bullish reversal. Despite the dovish move, the DXY briefly dipped below July’s 96.37 low before recovering to 97.65, supported by resilient U.S. Treasury yields.

The dragonfly doji, characterized by near-identical open, high, and close prices with a long lower shadow, indicates that a sharp decline was quickly absorbed by buyers. Historically, a pattern like this after a downtrend suggests an imminent shift to dollar strength. A stronger dollar can weigh on risk assets, including cryptocurrencies, setting the tone for the week ahead.

Bitcoin Faces Key Resistance
Bitcoin (BTC) mirrored market indecision last week, forming a weekly Doji candle at the resistance defined by trendlines from the 2017 and 2021 bull markets. This reflects hesitation among bulls and potential selling pressure at a critical long-term hurdle.

On the daily chart, BTC is flirting with a drop below the Ichimoku cloud, having breached the Sept. 1 trendline, which implies downside risk. Key support levels include the 50-day simple moving average at $114,473, followed by Sept. 1 lows around $107,300. Surpassing last week’s high of $118,000 is critical for bulls to regain momentum.

Ether Navigates Technical Pressure
Ether (ETH) remains under pressure, trading below the lower boundary of a contracting triangle on the daily chart, suggesting renewed selling dominance. Key support levels are the Aug. 20 low at $4,062 and the psychological $4,000 mark. Bulls must reclaim the 24-hour high of $4,458 to restore momentum.

XRP MACD Turns Bearish
XRP shows renewed downside risk. Despite the U.S. XRP ETF debut, the weekly MACD has flipped bearish, signaling growing selling pressure. Price action suggests a retreat toward the upper boundary of a descending triangle on the daily chart. Last week’s tentative breakout failed to trigger sustained buying, leaving traders cautious.

Fed Speeches and PCE Data in Focus
Investors are closely watching upcoming speeches from Fed Chair Jerome Powell and other officials for guidance on interest rates. While last week’s rate cut hinted at easing ahead, Powell emphasized a data-dependent approach.

Fed dissenting voice Stephen Miran, who favored a larger 50-basis-point cut, will also speak, adding an extra layer of market uncertainty.

The week concludes with the release of the U.S. core PCE index, the Fed’s preferred measure of inflation. Analysts anticipate a 2.7% year-on-year increase, with core PCE rising 2.9% in August—a slight uptick from July. These numbers could heavily influence expectations for future Fed policy.