Bitcoin Bulls Challenged by Dollar's Doji, XRP MACD Bearish Ahead of Fed Speak & PCE Inflation

This is a daily analysis by CoinDesk analyst and Chartered Market Technician Omkar Godbole.

DXY vs $BTC

Last week, the Federal Reserve (Fed) delivered its first interest rate rate cut since December, while signaling more easing in the coming months. Yet, despite this dovish move, the dollar index (DXY), which tracks the greenback's value against major currencies, finished the week with a dragonfly doji on the weekly chart – a classic bullish reversal signal suggesting a USD rally ahead.

The dragonfly doji gets its name from its distinctive “T” shape, which resembles the delicate wings of a dragonfly or the blade of a bamboo-copter toy. This pattern forms when the open, high, and close prices are nearly identical, accompanied by a long lower shadow that reflects a sharp price decline quickly reversed by buying pressure. The DXY initially fell on the news of the Fed rate cut, briefly dipping below the July low of 96.37, only to bounce back and end the week largely unchanged at 97.65, supported by resilience in U.S. Treasury yields.

The appearance of the dragonfly doji after a notable downtrend and at critical support, as in DXY's case, suggests an impending bullish shift in the market trend.

Traditionally, dollar strength corresponds with weakness in dollar-denominated and broader risk assets, setting an interesting stage for the week ahead.

DXY and $BTC flash opposing signals. (TradingView/CoinDesk)

Bitcoin $BTC$114,625.48 mirrored this theme in the week ended Sept. 21, forming an indecisive Doji candle at the critical resistance marked by the trendline from 2017 and 2021 bull market peaks. Given that this Doji appeared at such a significant long-term trendline, it leans more bearish, signaling hesitation among bulls to lead the price action and renewed selling pressure from the key hurdle.

On the daily chart, $BTC are teasing a move below the Ichimoku cloud, with the trendline drawn from Sept. 1 lows breached, implying potential downside risk.

The first line of support is seen at $114,473, the 50-day simple moving average, followed by Sept. 1 lows near $107,300. The past week's high of $118,000 needs to be overcome to weaken the bearish case.

$BTC has lost the trendline support. (TradingView/CoinDesk)

Ether range breakdown

Ether ($ETH) faces its own technical dilemma; it hovers below the lower end of the contracting triangle pattern on the daily chart, suggesting renewed seller dominance and potential for deeper losses. The breakdown has put focus on the Aug. 20 low of $4,062 followed by the psychological support of $4,000. The 24-hour high of $4,458 is the level to beat for the bulls.

$ETH's contracting price range has resolved bearishly. (TradingView/CoinDesk)

$XRP's MACD flips bearish

Meanwhile, $XRP presents a frustrating picture for bulls. Despite the recent debut of an $XRP ETF in the U.S. on Thursday, the MACD indicator has crossed bearish on the weekly chart, indicating a renewed downside bias. Price indicates that $XRP is slipping back to the upper boundary of a descending triangle on the daily chart. Although a tentative breakout occurred last week, it failed to ignite a sustained rally, leaving traders cautious.

$XRP remains under pressure with MACD turning bearish. (TradingView/CoinDesk)

Focus on the Fed speak and PCE

This week, Fed Chairman Jerome Powell and nine other officials are scheduled to speak, with markets likely to closely watch the same for cues on the interest rate trajectory. While the Fed cut rates last week, signalling more easing ahead, Powell threw cold water over optimism by stressing a>

President Donald Trump appointee Stephen Miran will also speak of his independence as a policymaker, having dissented in favor of an outsized 50 basis point rate cut last week.

On Friday, the U.S. core PCE index, the Fed's preferred measure of inflation, is scheduled to be released. According to Amberdata, the data is expected to show that inflation rose 2.7% year-on-year, with core jumping 2.9% in August, marking a slight uptick from the previous month.