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It's CPI Day! (again...)
US CPI +6.4% YOY (est +6.2%)
Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, GC, CL, ES, and NQ as well as our favorite altcoins
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What We Are Watching
We further breakdown our case for these cryptos here : What We Are Watching
NFT marketplace Blur set to raise at billion dollar valuation (The Block)
Court approves sale of certain FTX investments, tokens and equity shares (The Block)
Investors Rush to Tether as Paxos' BUSD Faces Regulatory Heat, Curve Liquidity Pools Show (CoinDesk)
UK Financial Regulator Takes Enforcement Action Against Crypto ATM Operators (CoinDesk)
Magic Eden Cuts 15% of Staff, Takes ‘Hard Look’ at Restructuring (Blockworks)
BUSD Is Under Attack. Are USDC and USDT Next? (Blockworks)
Judge Halts SEC, CFTC Cases Against Bankman-Fried Until Criminal Trial Concludes (Decrypt)
New ‘Sinbad’ Bitcoin Mixer Unmasked As Formerly Sanctioned Blender (Decrypt)
Giannis Antetokounmpo NFT Sells for Record-Breaking $187K on Sorare NBA (Decrypt)
We are trying a slightly different format today because of the volatility that comes with CPI days. As you can see above BTC’s price fluctuated around 1.5% within the 15 minutes of the CPI data being release. This was a confusing CPI release because there are YoY effects but also the formula for how CPI is calculated was changed. Lass year the CPI was backward looking two years and in 2023 has been changed to only consider 2021.
- 2022 CPI = 2019+2020 consumption
- 2023 CPI = ONLY 2021 consumption
With the new formula the expectation was that YoY CPI would come in at 6.2% and the actual number came in at 6.4%. This was an expectation miss and so far the market is mostly responding with volatility, though one could argue slightly to the downside so far.
The initial reaction to the CPI data has been relatively small volatility compared to BTC’s volatility since the beginning of January. In fact you can see that the last 3 days have seen nearly sideways price action with squeezing volatility. Generally a volatility squeeze results in a big move in either direction. What are the supports and resistances to look out for?
BTC is currently trading just above the FTX local top at $21500. This price level is currently acting as the most significant support.
Under $21500 is $20400 the local low during the mid January consolidation. Under that would be all the way down to $17500 (the neckline of the Jan breakout)
If BTC can find a rally to the upside here, the first resistance is likely to be $23000 where the price broke down last week.
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Possible Course of Action
Spectate and wait for a break below current support or a move above $22k
Short now because of CPI miss expecting a move to $20,500
Long $20,500 if it holds as support
Get long if BTC can rise back above $23000 and hold it as support (short $23k if it acts as resistance)
The Bulls’ Defense:
Currently holding FTX local top as support
The Bears’ Prosecution:
CPI miss, could cause US equities to sell off
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