Macro vs Technicals
The macro backdrop now has several moving parts developing, including mixed data around whether the Fed will accelerate tightening or stick to 25bps increments.
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 macro backdrop now has several moving parts developing, including mixed data around whether the Fed will accelerate tightening or stick to 25bps increments. This is causing wild swings in the bond markets. Elsewhere, the unintended consequence of higher rates is rearing its ugly head in the form of Silicon Valley Bank, leading to sharp risk-off moves. The latter, hot on the heels of the Silvergate saga, has seen crypto extend the bear phase through the ideal support region. The charts are showing little sign of a base, at the moment.
Ethereum vs Bitcoin
While the cycle structures from a big picture perspective suggest Bitcoin and Ethereum should generally still work in tandem, leaving us in a medium-term range, the short-term outlook has been for XET to gradually outperform from the range lows. That has been the case and should remain so in the coming week. (Blue lines depict the current range).
The correction from 1742 has extended more aggressively after breaking the first target area at 1485 (previous 4th wave and Fibonacci). Momentum remains in bear mode, and as such we can still see a move towards the next support in the 1328 region and then watch for signs of a higher low to develop. A rally back through 1520/1550 would signal that wave C is complete and the nature of that move, whether we develop into a multi-week range.
From a long-term perspective, the decline from the 2021 high at 4866 completed a bear cycle at 880 in June 2022. Since then, we have seen a significant recovery, the most recent leg from the
November 2022 lows reaching 5th wave projection targets around 1742. Once the current correction is complete, we should resume the reversal from last year and see a move up to test the 2020 reaction highs and then onto 2450 longer-term targets.
The reversal from 25,250 reached the previous 4th wave and Fibonacci support around 21,510 targets, but failed to hold there, accelerating through this region. Momentum studies are still in bear mode and as such we can still extend to support in the region between 19,215 (Fibonacci) and 18,100 (the wave 1 highs and pivot region from 2022. Then we see if we start to show signs of a base developing. At this stage a rally back through 21,600-22,000 is needed to signal wave C is complete and a higher low in place.
From a long-term perspective, the bear cycle from the 2021 highs completed last year at 15,574. We staged an impulsive recovery from that low, which completed a 5-wave cycle exactly at projection resistance, which was aligned with the pivot resistance going back to May 2022. Once the current correction phase is complete, the reversal from last November should continue, with a move up towards 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