Macro vs Technicals
The downside of cross-asset analysis was shown this week. Broader studies remained bearish equities, which suggested crypto could see an extension of the correction we were in.
This article is only available to Macro Hive subscribers. Sign-up to receive world-class macro analysis with a daily curated newsletter, podcast, original content from award-winning researchers, cross market strategy, equity insights, trade ideas, crypto flow frameworks, academic paper summaries, explanation and analysis of market-moving events, community investor chat room, and more.
Macro vs Technicals
The downside of cross-asset analysis was shown this week. Broader studies remained bearish equities, which suggested crypto could see an extension of the correction. That was not the case, with an aggressive reversal led by bitcoin. While the banking crisis looks to have calmed, for now, we await to see if it affects the Federal Reserve’s hiking path this week (it did not deter the ECB from raising rates another 50bps). The bond markets currently think that is more likely the case and are even pricing in cuts this year, again. Either way, crypto looks to have moved into its next phase of the underlying bull market.
Ethereum vs Bitcoin
My studies have been wrong here. They suggested that we had held range support and could extend to range resistance. While we saw some of that process, the spread has collapsed back through the triangle lows. A reversal back into that range is needed to suggest a false break. Otherwise, we look to be in a new dynamic of bitcoin outperforming for the next few weeks.
We did not see the extension of the correction phase expected this week, reversing from the 117-day moving, the break back through 1520/1550 confirming the correction was over. We now look to be moving into the long-term bullish outlook. As with bitcoin, pullbacks should be choppy, corrective and limited, with 1610-1550 support. A decline through there and then 1370 would negate the current bullish outlook.
From a long-term perspective, the decline from the 2021 high at 4866 completed a bear cycle at 880 in June 2022. Now the short-term correction looks to be over, we should see an extension of last year’s reversal up to test the 2020 reaction highs and then onto 2450 longer-term targets.
The near-term studies suggested an extension this week into the 19,215 (Fibonacci) to 18,100 (the wave 1 highs and pivot region from 2022) support region to complete wave C of the correction phase. However, despite a risk-off move in the broader markets, bitcoin reversed sharply from the 117-day moving average, through 21,600-22,000, to confirm the correction was over.
We now look to be in a more dynamic trend phase within the longer-term bullish outlook. As such, pullbacks should now be choppy, corrective in nature and limited. Support, in this regard, is seen in the 24,500-22,700 region. A decline through there would be a warning sign that we have seen a false upside breakout, while a return through 19,578 lows would negate the bullish view.
From a long-term perspective, the bear cycle from the 2021 highs completed last year at 15,574. We now look to be in the next bull phase after the recent short-term correction, targeting 33,000.
Robin is a global market veteran, with over 30 years of experience on the sell and buy-side, as a strategist and trader. He now provides strategic trading and investing advice to hedge funds, family offices, HNW individuals and trading desks around the globe.
Photo Credit: depositphotos.com
(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)
Enter your email to read this Macro Hive Exclusive
Already have a Macro Hive Prime account? Log in