The CPI Rodeo
Bitcoin near term volatility spikes as the market digest 9.1% CPI print
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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
Twitter loses service in the US and Europe (The Block)
BNB Chain launches dApp aggregator platform with anti-scam alarm (The Block)
OKX joins other crypto companies, approved to operate in Dubai (The Block)
DEX Contango Pushes Alternative to Perps With 'Expirable Futures' (CoinDesk)
Crypto Miner CleanSpark Continues to Take Advantage of Bear Market as it Scoops Over 1K Rigs (CoinDesk)
Celsius is ‘Deeply Insolvent,’ Alleges Vermont Regulator (CoinDesk)
Crypto Mining Firms Take Different Approaches to Selling Bitcoin (Blockworks)
DeFi Exploits Top $1.8B YTD, Though Security ‘Getting Better’ (Blockworks)
GameStop’s Ethereum NFT Sales Dwarf Coinbase NFT in Two Days (Decrypt)
Polygon Among Six Web3 Projects Selected for Disney Accelerator (Decrypt)
BTC Outlook
Lets zoom in a bit today to see how the market structure has developed this month. First, you can see the June low, which was the absolute low so far for 2022 at ~$17500. Before the month ended the lows were retest and BTC got a bounce off of ~$18600, 6% higher than the lowest low, and finally yesterdays CPI resulted in nearly vertical price movement found support at $18901. The short term trend is higher lows, but what’s missing is higher highs. Instead the price continues to consolidate and squeeze tighter.
Because of these higher lows it now possible to take a view that BTC will likely not go any lower until one of these 3 key levels are broken. So, buying the dip is probably the way to go until then. If they are broken then shorting comes back into play as this would be a sign of weakness. Most likely as long as BTC does not break above the July high more consolidation between $19,000 and $22,000 is likely. So, I know it’s boring, but what we’ve been saying all month still holds true. You can trade the range or wait and look for breakouts above and below these key supports and resistance.
Possible Course of Action
Scale into a long under $20k as a long term hold (3+ years)
Long under $20k for a short term retest of $20k
Do nothing and wait for a breakout or breakdown
Short targets if BTC loses $19k ($17.5k, $15k, $9k)
The Bulls’ Defense:
Series of Higher Lows
CPI print sell off was bought up quickly
The Bears’ Prosecution:
Global macro uncertainty
Highly correlated to ES and NQ which are selling off
ETH Outlook
Nothing new to see here. Please refer to Tuesday’s Newsletter. I guess the only takeaway is that the CPI print had little impact on the ETH/BTC ratio.
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
Long if price breaks above the top of this wedge and holds as support
Short if price breaks below the wedge and meets it as resistance
The Bulls’ Defense:
EIP-1559 has burned $2,755,361,606 (2,534,248 ETH) so far. Supply constraints should continue to have a positive impact on price.
ETH 2.0 launch
The Bears’ Prosecution:
EIP-1559 ETH burn has slowed down due to low network usage
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
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