BOJ Raises Its Cap

Crypto markets coincidentally rally as BOJ raises the cap on 10 yr yields from 0.25 to 0.5.

Dec 20, 2022

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Cheat Sheet -

Support and resistance levels and our daily, weekly and monthly bias on BTC, GOLD, OIL, 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

Crypto News

Coinbase's Brian Armstrong: Crypto regulators should leave DeFi alone (The Block)
BlockFi seeks to reopen withdrawals for certain users (The Block)
Visa proposes using StarkNet for automatic recurring payments (The Block)
Polygon Founder Unveils Web3 Accelerator Beacon (CoinDesk)
Crypto Twitter Delves Into Strange Side of Trump’s NFT Collection (CoinDesk)
Bitcoin Addresses Tied to Defunct Canadian Crypto Exchange QuadrigaCX Wake Up (CoinDesk)
Crowdfunding gets leg up from Lightning Addresses on Bitcoin (CoinTelegraph)
GBTC Not Interested in Redemptions, but Considering Other Options (Blockworks)
Binance Market Share Bounces Back, BNB Price Consolidating (Blockworks)
Alameda-backed Ren Warns Crypto Could Be Lost as Platform Shuts Down (Blockworks)
FTX Now Seeking 'Prompt Return' of SBF's Political Donations (Decrypt)
Bored Ape Creator Yuga Labs Nabs New CEO From Gaming Giant Activision Blizzard (Decrypt)

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BTC Outlook

After a fake out to the upside of this bull flag, we are now witnessing a potential bear trap. Of course, it’s only a bear trap if the price moves back up. The obvious resistance here is $17000, the big round number that creates a psychological effect on buyers and sellers. One of our trading rules is “everyone is always looking for a reason to buy and sell” and I guess yesterday they got one. The bank of Japan gave up on holding the rate of their 10 year bonds to 0.25% and will now let it move up to 0.5%. The 10 year bonds (JGBs) are a widely traded instrument and they are now yielding 100% more than they were two days ago.

This will have broad effect on global markets, but I personally would not be so quick to jump to the conclusion that crypto markets are responding to this news. Even if this was a response, I am not sure it’s very meaningful or much time should be spent trying to gauge the impact.

I am a bit surprised by Bitcoin’s recovery this morning. It seems to have turned at round at a seemingly random point based on any technical indicators. This makes me even more skeptical if it cannot push through $17k this week. Historically, there has been a Santa Claus rally that starts just after Christmas and ends a few days into the New Year. $17k again becomes a critical resistance to break if Santa Claus is going to show up this year.

Possible Course of Action

Do nothing wait for $17k to act as resistance or support
If $17k holds as support get long with an expect return to the 50 day moving average ($17.3k) and possibly the 20 week around $19.4k.
If $17k acts as resistance get long with an expected return to $15.5k (the yearly low).

The Bulls’ Defense:

Bull Flag still in tact

The Bears’ Prosecution:

$17k currently acting as resistance

A Closer Look

This section will be focused on taking a closer look on what Hal thinks is important to watch in the coming week.

This morning Hal reviews a stock and an altcoin you should be using as a barometer to gauge market sentiment.

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