Crypto markets threw a pleasant head faux this week by rallying into resistance on a “optimistic” Consumer Price Index (CPI) report, earlier than retracing the vast majority of these positive aspects proper after Federal Reserve Chair Jerome Powell took on a surprisingly hawkish tone throughout his post-rate-hike presser.
The Fed hiked rates of interest by 0.50%, which was properly throughout the expectation of most market contributors, however the eyebrow-raiser was the Federal Open Market Committee consensus that charges would want to achieve the 5%–5.5%+ vary with a view to hopefully obtain the Fed’s 2% inflation goal.
This principally threw chilly water on merchants’ lusty desires of a Fed coverage pivot going down within the first half of 2023, and the damper on sentiment was felt all through crypto and equities markets.
As the charts beneath present, Bitcoin (BTC) and Ether (ETH) reversed course proper as Powell started his presser on Dec. 14.
BTC/USDT and ETH/USDT, 4-hour chart. Source: TradingView
How do you want them apples?
It’s additionally not shocking that BTC and ETH worth motion and market construction on the decrease time frames additionally look an identical.
So, sure, markets retraced their latest positive aspects over unhealthy information, however has something really “modified?” Bitcoin continues to be buying and selling with a transparent vary; Ether is doing the identical, and neither asset has made new yearly lows lately.
As the saying goes, when doubtful, zoom out. So, let’s do this briefly and take a greater have a look at the lay of the land.
When doubtful, zoom out!
On the weekly timeframe, Bitcoin continues to be bouncing round in a falling wedge, a basic technical evaluation sample that tends to lean bullish. The worth is doing just about what one would anticipate the worth to do throughout the framework of technical evaluation.
There’s anticipated resistance on the 20-MA, which is lined up with the descending trendline. The quantity profile metric reveals a bulk of exercise within the $18,000–$22,500 vary, and the decrease arm of the falling wedge has to this point functioned as help.
Similar worth motion was seen in May 2021–July 2021, however in fact, the conditions have been fully completely different, in order that’s a little bit of an apples-to-oranges comparability. There’s a divergence on the MACD and RSI. In quick, the worth is trending down, and MACD and RSI are trending up on the weekly timeframe, which is probably one thing price keeping track of.
BTC/USDT 1-week chart. Source: TradingView
What I like in regards to the weekly timeframe is that candles kind slowly, and tendencies, whether or not bullish or bearish, are fairly simple to name and make sure. It’s simpler to construct a strong funding thesis of the weekly timeframe than spend limitless hours pouring over four-hour, one-hour and each day charts.
Related: Ethereum and Litecoin make a transfer, whereas Bitcoin worth searches for firmer footing
Anyhow, breakouts from the falling wedge are prone to be capped on the descending trendline, whereas a breakdown of the sample or drop beneath the decrease help may see the worth fall as little as $11,400. That’s all throughout the market consensus for many analysts.
As for Ether, like I lined in better element in final week’s Substack and publication, it’s nonetheless doing the bull flag factor: bouncing round between help and resistance and seeing breakouts capped at key transferring averages and the descending trendline of its bull flag.
$2,000 stays the eventual goal on the radar of most analysts, and draw back to the $1,100 is way from surprising.
A dip below $1,000 is prone to elevate eyebrows and draw the eye of these in search of extra resolute shorts.
ETH/USDT 1-week chart. Source: TradingView
Ether worth motion is principally doing the identical predictable factor as Bitcoin: nothing to see right here, persist with the plan (no matter that could be for you). Similar to BTC, there’s additionally a divergence on Ether’s MACD and RSI — one thing price keeping track of.
Last week, I additionally put eyes on Litecoin (LTC) attributable to its upcoming community reward halving. While the worth has retraced from its native prime at $85, the uptrend stays intact, and on the each day timeframe, the GMMA indicator continues to be vivid inexperienced.
LTC/USDT 1-week chart. Source. TradingView
The vertical black strains monitor LTC’s bullish momentum main into halvings and the corrections that happen proper after the halving happens. For the time being, every little thing appears to be continuing in line with plan.
Of course, none of that is monetary recommendation. Make certain you do your personal analysis, calculate your threat, take into consideration the worst-case situations, weigh your ROIs and take revenue, and lower losses zones a couple of days earlier than really making a commerce. Remember that 1:3 and 1:5 is the optimum risk-to-reward consequence one ought to be chasing after.
Ignore the short-term FUD and worth motion. Zoom out and construct a powerful thesis from that vantage level.
This publication was written by Big Smokey, the creator of The Humble Pontificator Substack and resident publication creator at Cointelegraph. Each Friday, Big Smokey writes market insights, trending how-tos, analyses and early-bird analysis on potential rising tendencies throughout the crypto market.
The views, ideas and opinions expressed listed below are the authors’ alone and don’t essentially mirror or signify the views and opinions of Cointelegraph.
This article doesn’t include funding recommendation or suggestions. Every funding and buying and selling transfer entails threat, and readers ought to conduct their very own analysis when making a choice.