Small update on the US Dollar Index. Not to say we are out of the woods here, but its nice to see the DXY drop a few % over the past week. There are a few factors driving this but it remains to be seen if it is a brief retracement on the way up, or a more sustained downtrend. Historically this range rejects DXY (it has on several occasions in recent decades),...
We see DXy finally lead with a strong rejection. That doesn't mean its done climbing, there is still much uncertainty in terms of macro economic climate and this can have a profound effect on the US dollar. I'm watching the 2020 high (around 103) for the next retest; closing under that might suggest a larger drop, but respecting that support could indicate a brief...
The question on everyone's mind is how long will it ride these blue channels, and where is the floor. I've done some analysis looking at momentum via TSI and there appears to be some subtle but growing bullish divergence on momentum, but it highly depends on a few factors like 1.) the CPI report; any Fed speeches or press releases in reference to inflation or...
As noted in earlier analysis, there was a decision for the market between the yellow uptrend and the blue downtrend. The market is overwhelmingly leaning into the blue downtrend once again and we are likely to see a retest of this support level in the lower $30s.
Lets see if this macro support extending from June 2021 holds, currently around $35.5k. If bulls can defend this range we might have some spicy green days coming. If they lose it, then lower $30s and upper $20s are the next targets for bears.
Well the $DXY went from dumping yesterday on the FOMC news to pumping today on .. well who knows what. News of a weak Euro possibly? That said, there are still plenty of bearish divergences on momentum, and midst a range of HTF historical resistance for DXY. But if we break clear of this and continues the mad dash to the upside, it might spell some doom for...
During the US Government's FOMC press conference we logged a 1% move on DXY, dropping to the previous support level between 102.4 and 102.5. That doesn't mean it can't/won't recover and rally more, but its not looking good in the near term as markets appear to believe the 0.5bp hike signals a weakening dollar. As with earlier FOMCs, if they don't like how the...
I highlighted the major decision point in purple. This is where we see a retest of the macro support (dating back to 2020) and locally since early 2022. Its also a decision whether the blue downtrend from November or the more recent uptrend in 2022 will be the prevailing trend in coming weeks.
While I am not a fully committed bear yet (but acknowledge things are pretty bearish these days), I still think a rally in coming weeks/months is possible -- BUT given the macroeconomic environment.. one should always have a plan for either direction.. so lets talk about bearish scenarios. Lets talk about a scenario where we lose the macro support (yellow...
The purple circle represents a key support level, both locally and on the macro dating back to Q4 2020. That is a support extending from October 2020 to present. Its also the next step down in the purple downtrend that is the prevailing trend currently. Ideally if the macro market conditions stabilize, we retest that support and look for a bounce. Closing under...
I did some quick back of napkin math. I logged the average duration of DXY overbought conditions before it properly rejected below the 70 RSI . This is all approximated based on the 4d DXY chart. If you discount the two outliers (the 16d and 231d events) your average duration is 49 days overbought before seeing a proper rejection. If we included those outliers...
Watching some of these local support levels (in green on the right price column). The best outcome is that we continue to respect the $38.7k as support going into Monday which barely gives us a higher low. If we drop further, an optimistic target is around $38.1k on the downtrend channel support. Below there is $37k, $35k.At $35k the macro uptrend is...
Do with this what you will. Bitcoin spent 209 days since 06 January 2021 trading in this range. Thats approaching almost half of the past 16 months with at least intraday between $35k and $45k.
Looking at the nail biter from yesterday - Bitcoin is riding this lower support... whales really wants to sweat us. Half of trading is psychological. Trade safely and by managing your risk, you also manage your stress- and thats how you become a winner in crypto. Once you master emotions and risk, you can master the technical side of trading.. and thats how you...
50 years of $DXY. Inflation peaks historically correlated to local DXY lows. Now we have DXY in 2022 at a 30 year resistance, presenting bearish divergence on momentum, semantics are questionable on a good day.. Things could get very spicy soon. Of course I watch this because of it's inverse correlation to Bitcoin.. and this is a big part of why I believe we...
Currently dropped to a confluence of the 78% fib and key support levels. We closed out a long running series of whale bids from $44l to $40k, and I think the last piece of the puzzle is the CPI report Tuesday. General market sentiment is likely a combination of factors- the US Government making public statements every couple days (for two weeks) about inflation...
As noted yesterday, if we drop below $41.3k I was looking at supports around mid $39.5k. We did log a bounce there and with the trading day coming to a close I hope we'll see less volatility going into tomorrow.. more downside can't be ruled out but like I said - $40k range has a lot of support too. But honestly the next step largely depends on the government...
Going into this week, we have a lot of earning reports and more importantly - Tuesday the Consumer Price Index (CPI) will be released, reporting on the state of inflation. It might be accompanied by language from the US Government that either spooks investors or lifts the markets.. but like any big news event, there is increased volatility and potential selloffs...