Perhaps due to the risks around the debt ceiling and the USD rallying, crypto is continuing to ignore the move and de-couple from the Nasdaq. The technical outlook still views the price action as corrective.
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Macro vs Technicals
US data continues to remain robust. As Dalvir, Dominique and the Fed minutes have highlighted, limited progress on fighting inflation along with employment and growth holding up suggest further tightening is likely. Lower GDP and employment figures are needed to turn that thought process around.
Meanwhile, the Nasdaq accelerated higher, particularly helped by Nvidia’s earnings this week. At the same time, the Russell 2000 slipped back from range resistance. Perhaps due to the risks around the debt ceiling and the USD rallying, crypto is continuing to ignore the move and de-couple from the Nasdaq. The technical outlook still views the price action as corrective.
Ethereum vs Bitcoin
The cross continues to grind higher, this week pushing through trendline resistance. As such, no change to the bullish outlook after holding and reversing higher from Fibonacci support around 0.062. Targets are for an eventual move back towards the previous range highs. The break of trend line resistance at 0.06838 should open an extension to 0.075-0.078, with a decline through support now at 0.067 the first warning sign of a failed rally attempt.
While it has been disappointing to not see Bitcoin try to push higher this week, the price action remains corrective. As highlighted in recent reports, there is still the risk wave C from 31,000 can test the 25,500-25,000 weekly trend and pivot support region. So, we are still in the ideal zone to see a base developing, with a break back through 27,700 pivot resistance suggesting that low is in place for at least a move back to the recent highs as part of a range, but eventually to new highs targeting next resistance in the 33,000 region.
A collapse through 25,000 would be the first warning sign that isn’t the case, opening the risk for a move to 22,000-20,000.
From a longer-term perspective, my studies suggest the bear cycle from the 2021 highs completed last year around 15,500. First targets and resistance in the bull move lies in the 33,000 region. But the main target is 36,000, that being Fibonacci and the head and shoulders projection. I suspect we see that region hold on the first test, but ultra long-term targets are 42,000-48,000.
A decline back through 19,500 would negate and signal the whole move up to around 30,000 has just been a 3-wave correction process. It would also signal we are likely to remain in a side and choppy range between 15,000 and 30,000 for several months.
No change. As with Bitcoin the pullback from the 2125 high is viewed as a 3-wave correction, with the market in wave C. While there is a risk, we could still see the C wave extend towards 1720-1650 support that risk was reduced after prices broke up through 1850. My studies still suggest we are in base building for a move through channel resistance at 1896 to open a run back to 2000-2112 highs. This may be part of a broader range, or we just move straight to new highs.
A collapse through and close below 1650 would be the first warning this outlook is wrong and risk a much deeper setback towards the 1370 March lows. From a longer-term perspective, the reversal from last year’s lows targets ~2400/2450 resistance, but through there can extend towards 3000-3300. A decline back through 1400 negating this bigger picture outlook, signalling the gains have just been another 3-wave correction and keeping us in a wide but lower choppy range.