While high inflation and a stagnant schedule of interest rate hikes have driven the equity market significantly higher, many traders fear that the current 32-day uptrend in the Dow and S&P 500 could be a bear market rally.
17) release from the Federal Open Markets Committee (FOMC) should give more context to the Federal Reserve’s current view of the health of the United States economy and perhaps shed light on the size of the next interest rate hike. ,
For the past month, extremely bullish crypto traders on Twitter have also been using a narrative that emphasizes selling bitcoin, ether (ETH) and altcoins before FOMC meetings and then rallying afterwards if the rate is set. aligns with the estimated figures of investors.
Somehow, this short-term dynamics also contributes to investor confidence that the Fed will “pivot” its monetary policy from interest growth and quantitative tightening after “inflation peaks.” This can be a somewhat profitable trade for savvy day-traders, but it’s important to note that inflation is currently at 8.5% and the Fed’s target is 2%, which is a long way to go.
Ultimately, the price of bitcoin maintains a high correlation to the S&P 500, so investors would be wise to avoid narratives such as tunnel vision that align with their bias and tracking the performance of equity markets.
Bitcoin Sells at Multi-Month Trendline Resistance
Over the weekend, bitcoin made a strong move on a multi-month downtrend line and broke the $24,000 level, following a path that many traders had predicted would lead to an upside move and the VPVR gap above $28,000. Will be filled up to the $29,000 level.
$BTC Really looked like it was going to go away last night – and now we have 2x the brewery outside pic.twitter.com/gkyLodiXi6
— Cheds (@BigCheds) 15 August 2022
trader’s trades Told “BTC really looked like it was going to go last night” but selling at resistance created an “outside bar” where “the prior trend was challenged” and according to Cheds, this is a sign that “the trend is halting.” May and may be on the lookout for signs of further weakening.”
Bitcoin’s Bollinger Bands are also narrowing, a sign that a directional move is imminent, but we have already seen an expansion in the top band at the $25.6K trendline resistance. Is there a retest of $22.4K before this? $BTC Trying to grind more? Some have mentioned the falling nail… pic.twitter.com/wi1VpGt2y7
— Big Smokey (@big_smokey1) 15 August 2022
Merchant under the pseudonym “Big Smokey” agreed that a “strong directional moveCiting a tightening in the Bollinger Bands and different Super Guppy indicators may be on the cards as the bitcoin price moves closer to a multi-month downtrend line.
There are some signs that a strong directional move is on the cards for bitcoin: Super Guppy is getting real tight, possibly cutting $26% a pop before cutting more sideways or going down to grab what will be new liquidity at $24K. Might excite up to $28K. /r Test again until… pic.twitter.com/1VgAkjj10o
— Big Smokey (@big_smokey1) 15 August 2022
In a separate chart, Big Smokey suggested That if the descending trendline is broken, bitcoin could see a “26% pop to $28K before cutting further sideways”, resulting in an eventual retest of the $24,000 level.
After hitting similar overhead resistance levels, most altcoins also followed bitcoin’s uptrend by posting single-digit losses, but those that were flashing downward signals are still rounding out with a reversal pattern.
related: Shiba Inu tracks 50% rally as price enters ‘cup-and-handle’ breakout mode
Every dog has its day
Interestingly, on Sunday (14 August) popular traders on crypto Twitter predicted that sharp gains from meme tokens like Shiba Inu (SHIB) and Dogecoin (DOGE) were a clear indication that Bull phase was over-extended And on the way to improvement.
Pulled it from the archives.
One year apart, same sector, different race.
Time is a flat circle. pic.twitter.com/QplWWT43R5
— Hasaka (@HsakaTrades) 14 August 2022
Ultimately, after rallying 130% and 42.5% from Ether and BTC, each was ready to take a slight profit, especially at resistance. Open interest on both assets is close to all-time highs, but what would have to happen to trigger BTC to breakout or breakout at the multi-month downtrend line is unknown.
Perhaps a 1% increase, tighter crypto regulations or a surprise change in the equity markets could send the price back to yearly lows. Alternatively, a successful Ethereum merge could be a positive catalyst that triggers a higher volume surge above Bitcoin’s key resistance level.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.