#016
The return of the Dove.
Hello Bitcoin enthusiasts.
After a brutal Weekly Open, markets deleveraged ahead of the FED meeting.
The verdict came in: a 0.75% hike in interest rates. The second time in a row.
In the same fashion as the CPI print result, we observed another contrarian reaction. You can refer to my article “The Pivot” for reference.
Tightening economic measures have sent the market higher.
How could that be?
One can argue that most participants were expecting a 1% hike instead of a 0.75% one. As the hike went as forecasted, major actors saw a probable top of the tightening measures.
Would that imply the bottom of the market and a bet on a softening towards the end of US midterms?
As sentiment is shifting across the board, a relief rally could be on the cards.
Trend, Support and Resistance, Moving Averages
In my previous newsletter, I outlined 21000$ as an optimal risk:reward zone for long term players.
A key area for them to enter, and sustain a cycle bottom theory.
Jerome Powell and the FED sent the market in relief territory. Bitcoin surged. It swiftly reclaimed its 200 Weeks Moving Average.
The blue area I have outlined must hold to let the bulls have a shot at the real zone of interest at 27,000$. That was the starting point of the 3AC & Friends collapse.
We can expect a retest of both this blue area and the local top at 24200$ in the coming days. Sentiment is good. Bulls have the hand and until proven otherwise.
I expect us to go higher.
Indicators are almost all still neutral on the higher timeframes. Caution prevails.
Yet the outlook is optimistic for the markets at the moment.
A softened FED is all the markets wanted, and Mr. Powell gave them just that.
Excellent Content you shouldn’t miss:
This is not financial advice.
Please always do your own research.
Still seems very speculative given the news that the US is now technically in a recession based on the 2nd straight quarter of decline in GDP. The Biden administration is still painting an “all is well” narrative given the recent decrease in fuel prices at the pump, combined with relatively strong employment numbers. Lower gas prices will help cool inflation, which the FED likely took into account in the .75 vs 1.0 rate increase decision. Although I’d like to agree with the “blue skies ahead” analogy, I’d say it’s the outlook is “mostly sunny with a chance of isolated thunderstorms ⛈”