In light of the recent launch of the Bitcoin ETF on January 5th, 2024, and the consequential potential market impacts, a comprehensive analysis is warranted. The underlying dynamics of this analysis are twofold: firstly, the introduction of the Bitcoin ETF, a significant event in the cryptocurrency sphere, is expected to substantially influence market liquidity and investor sentiment. Secondly, the CME Group's probability tool, a sophisticated financial instrument for forecasting Federal Reserve policy changes, is currently indicating a high likelihood of the first interest rate cuts of 2024 occurring in the Federal Open Market Committee (FOMC) meeting scheduled for March 19th.
Furthermore, this analysis takes into account the revised Non-Farm Payroll figures for the entirety of 2023, which were adjusted downwards for 10 out of the 12 months. This revision paints a rather dismal picture of the economic landscape over the previous year, indicating a potentially protracted period of economic stagnation or even contraction. Such a scenario unavoidably caused investors to mis-price their models around a stable economy and soft landing. These will be re-adjusted over the coming weeks.
Given these factors, the hypothesis of this analysis is that Bitcoin, being a highly speculative asset, will likely undergo a corrective phase in the short term. This is anticipated to result in a retracement of Bitcoin’s value towards the $28,000 to $30,000 range. This projection is based on a combination of technical analysis, market sentiment, and the historical price behavior of Bitcoin in response to similar macroeconomic conditions.
The expected downward trend, however, is predicted to be temporary. As the date of the anticipated rate cuts draws closer, it is forecasted that Bitcoin will experience a significant rebound. This prediction is rooted in the historical precedent that loose monetary policies, such as rate cuts, tend to create favorable conditions for risk-on assets like cryptocurrencies. Investors, anticipating a more accommodative monetary environment, might increase their exposure to Bitcoin, thereby driving up its price.
In conclusion, while the short-term outlook for Bitcoin may be bearish due to the factors outlined above, there is a strong potential for a swift recovery and upward momentum as the March 19th FOMC meeting approaches and market conditions evolve. This analysis recommends close monitoring of both macroeconomic indicators and market sentiment to capitalize on the anticipated volatility in Bitcoin’s price.
Furthermore, this analysis takes into account the revised Non-Farm Payroll figures for the entirety of 2023, which were adjusted downwards for 10 out of the 12 months. This revision paints a rather dismal picture of the economic landscape over the previous year, indicating a potentially protracted period of economic stagnation or even contraction. Such a scenario unavoidably caused investors to mis-price their models around a stable economy and soft landing. These will be re-adjusted over the coming weeks.
Given these factors, the hypothesis of this analysis is that Bitcoin, being a highly speculative asset, will likely undergo a corrective phase in the short term. This is anticipated to result in a retracement of Bitcoin’s value towards the $28,000 to $30,000 range. This projection is based on a combination of technical analysis, market sentiment, and the historical price behavior of Bitcoin in response to similar macroeconomic conditions.
The expected downward trend, however, is predicted to be temporary. As the date of the anticipated rate cuts draws closer, it is forecasted that Bitcoin will experience a significant rebound. This prediction is rooted in the historical precedent that loose monetary policies, such as rate cuts, tend to create favorable conditions for risk-on assets like cryptocurrencies. Investors, anticipating a more accommodative monetary environment, might increase their exposure to Bitcoin, thereby driving up its price.
In conclusion, while the short-term outlook for Bitcoin may be bearish due to the factors outlined above, there is a strong potential for a swift recovery and upward momentum as the March 19th FOMC meeting approaches and market conditions evolve. This analysis recommends close monitoring of both macroeconomic indicators and market sentiment to capitalize on the anticipated volatility in Bitcoin’s price.
Comment:
This idea has been invalidated by current events.
Comment:
This idea has been re-validated by current events.
Each level L1-L3 and TP1-TP3 (Or S1-S3) has a deployment percentage. The idea is to flag these levels so I can buy 11% at L1 , 28% at L2 and if L3 deploy 61% of assigned dry powder. The same in reverse goes for TP. TP1: 61%, TP2:28% and TP3:11%. If chart pivots between TP's, in-between or in Between Sell levels these percentages are still respected. I like to use the trading range to accumulate by using this tactic.
Just my personal way of using this. This is not intended or made to constitute any financial advice.
This is not intended or made to constitute any financial advice.
FED Macro Situation Consideration:
All TP's are drawn within the context of a return to FED neutral policy. I do not expect these levels to be reached before tightening is over.
NOT INVESTMENT ADVICE
I am not a financial advisor.
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