Bitcoin is fighting its trendline resistance while Ethereum struggles at 1,736$. SPX bumps into the 0.702 fibs as the daily RSI enters overextended territory. Get the popcorn ready!
Bitcoin is taking the lead
How quickly sentiment can change... It remains a very remarkable phenomenon in the crypto world. Just last week, we were in turmoil. Everything was supposed to go wrong as the SEC went after crypto. They sued both Binance and Coinbase, and it was supposed to be the end for crypto.
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Bitcoin top-down analysis - Why I think it will go higher.
BTC looks bullish, and I will show you why using a top-down analysis.
The Week of Truth
Bitcoin remains in its consolidation range for over a month now, trying to bore everyone out of the market. FOMC this week could be the catalyst for a break in either direction. Beware of pre-FOMC volatility. Once price starts moving, it will likely be swift, like we have seen several times since the beginning of this year.
FOMC Day! This is how I'm going to play it.
In this newsletter, I will present the scenarios I expect for BTC and how I plan to anticipate the event.
Strong Economy + Strong Stock Market = Weak Bitcoin?
Market sentiment seemed to receive a positive boost from a series of mostly favorable economic indicators, particularly related to inflation. On Friday, stocks opened with significant gains after news broke that the core (excluding food and energy) personal consumption expenditures (PCE) price index, which is the Fed's preferred inflation gauge, had risen (only) 0.2% in June, down from 0.3% in May. This resulted in a year-over-year increase of 4.1%, slightly lower than expected, and the slowest growth since September 2021. Additionally, the employment cost index, closely monitored due to concerns about wage inflation among policymakers, rose 1.0% in the second quarter, also falling below consensus and marking the smallest increase in two years. But unlike the strength in the stock market, Bitcoin remained weak.
Retail getting manipulated again?
Finally, some price movement in the cryptocurrency market. Prices went down, and we saw a classic sentiment switch, even though it wasn't really necessary. As I have discussed in previous trade letters, BTC is clearly in an uptrend, and we can drop quite a bit and still make a higher low. After dropping out of the range, we noticed that everyone thought we would go much lower again. As usual, many people have missed the recent move on BTC. In this trade letter, I will explain what is being done to manipulate retail traders and the levels we need to watch for further upward movement in the cryptocurrency market.
The Wait Could Soon be Over
Since the beginning of this year, BTC had impulsive moves to the upside, leaving people not already in longs far behind, then pullbacks from the highs to just under the 50% mark, scaring late longers out of their positions, and giving bears / people who missed out on the move up hope for even lower prices, just to start the next impulsive way from right under the 50% threshold. In March it was a fair value gap in the discount zone that marked the end of the pullback, after that in June it was a bullish order block in the discount zone. This time around we see a fairly large fair value gap higher up in the discount zone (just like in March). Based on this, if the strong / impulsive uptrend in BTC is to continue, I would not be surprised to get an accelerated move down towards 27.7 - 28.2k, then the next leg up towards 34k within the next couple of weeks.