The Road To Nowhere
ETH and BTC retrace yesterday's post FOMC gains.
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Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, OIL, ES, and NQ as well as our favorite altcoins.
Crypto News
3AC Faces Possible Insolvency After Unforeseen Liquidations (CoinDesk)
Tether Sees Redemptions as Fear of Market Contagion Spreads (CoinDesk)
USDC Issuer Circle to Introduce Euro-Backed Stablecoin in U.S. (CoinDesk)
Fidelity exec says BTC may be “cheaper than it looks” (CoinTelegraph)
71% of high net worth individuals have invested in digital assets (CoinTelegraph)
Supply of stablecoins dropped sharply for first time ever in Q2 (CoinTelegraph)
BitMEX Co-Founder Delo Avoids Jail Time (Blockworks)
Wall Street Regulator FINRA Wants To Hire Fired Crypto Employees (Blockworks)
Celsius Lawyers Up Following Account Freeze, Liquidity Crunch (Blockworks)
Nansen Launches Messaging App for Web3 Communities (Decrypt)
OpenSea Moves to Seaport to Cut Ethereum Gas Fees by 35% (Decrypt)
TAG Heuer Wants You to Wear Your Bored Ape on Your Wrist (Decrypt)
BTC Outlook
We caught a quick (tradeable) bounce yesterday, but the whole thing only lasted a few hours. We know many of you have day jobs so catching trades like that are nearly impossible. That’s another reason we are suggesting caution in this market. Many long term Bitcoin HODLrs are screeching to buy the dip all over Twitter. Well it’s true buying here is 75% under the ATH and a rally back to the ATH would give you a 200% return. However, during the last crypto bear market you had plenty of time to buy the dip. There were literally years to buy at $6000 per BTC, many months to buy at $3000 BTC and years again to buy at $9000.
There’s nothing wrong with being a buyer here if you don’t have the time to micro manage a position as long as you understand the risks you are taking. The macro environment is still bearish with lots of uncertainty around inflation and what the fed is doing. As we showed you on Tuesday, there are some lower targets for Bitcoin : $19k, $12-15k, $9k. These are not guaranteed to happen over night and in fact it could take a long time for these targets to reach and the bear cycle to play out.
The most prudent thing to do in this market is to sit on your hands and watch. That can be hard in this market with all the volatility, but being willing to miss the first part of a rally can save you some headaches in these market conditions.
Possible Course of Action
Long under near or under $20k as a long term hold (3+ years)
Do nothing and wait for a breakout
Short rallies
Short targets if BTC loses $20k ($19k, $15k, $9k)
The Bulls’ Defense:
Downtrend has lost momentum
The Bears’ Prosecution:
Global macro uncertainty
FOMC rally retraced within 24 hours
ETH Outlook
See Tuesdays Newsletter for more details. There is not much new to say as the price continues to consolidate near 0.055 ETH/BTC. If you forced me to be long then I’d rather still be long BTC than ETH here. Consider short ETH long BTC as a possible way to play this. You would be going long Bitcoin Dominance which has been rising.
Once thing to note is the last 4 daily candles have all been hammers. This is usually bearish as it indicates buyers were unable to push the price back up. Stay cautious.
Possible Course of Action
Caution here as ETH is highly correlated with the tech stock sell off
Wait for BTC to rise above 50-day MA before long ETH
Short ETH/ long BTC might work
The Bulls’ Defense:
EIP-1559 has burned $2,739,302,410 (2,457,523 ETH) so far. Supply constraints should continue to have a positive impact on price.
ETH 2.0 launch
The Bears’ Prosecution:
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
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