Crypto & Economic Calendar
The events below inform governments, corporations, traders and investors on the health of the economy. I only list events noted as “high volatility expected” in related markets.
- 0500 ET: [EUR] Consumer Price Index (CPI)
- 0200 ET: [GBP] CPI
- 1030 ET: [USD] Crude Oil Inventories
- 1400 ET: [USD] FOMC Economic Projections & Statement
- 1400 ET: [USD] Fed Interest Rate Decision
- 1430 ET: [USD] FOMC Press Conference
- 0700 ET: [GBP] Bank of England (BoE) Interest Rate Decision
- 0830 ET: [USD] Initial Jobless Claims
- 1000 ET: [USD] Existing Home Sales
- 0945 ET: [USD] Global Service Purchasing Managers Index (PMI)
Bitcoin Indecision Prevails
Summary: It feels like we’ve been here before, and we have – Bitcoin indecision. It is unlikely to give a definitive direction this year, unless the regulatory climate is clarified, or the macro outlook improves. While we are likely near peak US interest rates, there is room to climb a little higher, which would squeeze the dollar higher and crypto markets lower. This is why I recommend Dollar Cost Averaging (DCA) into crypto this year, you won’t get left behind and you avoid the chop that comes with trading.
Last week’s decline found support along the confluence of two supports: the high-timeframe diagonal support extending from 2017’s cycle, and the local value range along $24,000. If these do not hold, downside continuation could lead Bitcoin to between the 50% and 62% fibonnaci retracement, or $20k to $22k.
Bitcoin Levels: $30k marked the most important support level in 2021’s bull market, and is the most important resistance to overcome in 2023. Several rejections from $30k since Q2 2023 add to the importance of $30k. Looking at the weekly chart:
- Immediate resistance: $27,400
- Immediate support: ~$25,760
- Current value range: $24,400 to $25,500
- Support levels:
- Resistance levels:
- $27,200 (21w EMA)
Bull Perspective: Last week’s breakdown was an opportunity for momentum and sentiment reset. Bulls were exhausted at $30k, and this retreat to a key support brings in more buyers and interest. This means a consolidation in this range can reverse into a new rally. The right news may also spark a reversal of sentiment and subsequent rally, such as a Bitcoin ETF approval, or additional regulatory clarity from the US Government.
Bear Perspective: A bullish reversal over the next month cannot be ruled out, but this writer’s bias continues to be weakly bearish pending the interest rate decision or regulatory news. We had a weak uptrend but the shallow retracement just under the 23.6 fib doesn’t align to sentiment. Momentum indicators on the weekly, such as TSI or RSI, also reflect a bearish momentum that hasn’t quite bottomed. $20k to $22k remain in reach, but is only marginally lower than current prices and will offer a great dollar-cost-average (DCA) opportunity for patient traders. DCA strategy also means that if this consolidation under $30k leads to a breakout, you won’t be left behind.
US Dollar Index (DXY)
The Dollar Index showed some short term strength in September, due to an indecisive but decidedly more hawkish US Fed, coupled with a struggling Euro. With the US FOMC this week, it remains to be seen how the dollar fares, but this interest rate decision could see the DXY rise or sink significantly.
The DXY nearly lost it’s most important support level between 100 and 101, but recently recovered to resistance around 105. Overlaying a Schiff Pitchfork, the DXY is barely clinging to the top channel, and any loss of the key support around 100 to 101 will correspond with a movement to the next lower channel, likely signaling a more prolonged downtrend.
From a technical perspective, the DXY is flirting with downside continuation; but entering the final stage of the current hiking cycle, we may see a prolonged “dead cat bounce” for the Dollar as the US Fed tries to thread the needle in squeezing demand but avoiding a recession. Historically over the past 50 years, losing support along 101 led to multi-month to multi-year downtrends.
Why do we care about the DXY?
The Dollar Index is a complex financial data point, a lot of external factors impact its value. But in the simplest terms, you can look at the relationship between DXY and risk assets like Bitcoin simply – they usually move inverse to each other. When DXY is up, BTC is down; and the opposite is true.
While things look up from late last year, there remains a pronounced uncertainty in the macroeconomic forecast, and regulatory climate. This is reflected in the past week low being 30, and this week flirting with 46 with little appreciable change in the macro or regulatory climate.
Its likely we see sentiment oscillate between 30 and 50 for the foreseeable future.
An ETF approval likely lead to improved sentiment and greed across Bitcoin and crypto markets. Further boosts to market sentiment will follow if the US Fed declares a pause on rates, peak rates, or if a recession is confirmed avoided. This is what will break the 30-50 range, with good news sending us higher.
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