Market Update: What You Need to Know (20 to 26 November)

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.

  • Monday
    • Nothing to report
  • Tuesday
    • 1400 ET: [USD] Federal Open Market Committee (FOMC) Meeting Minutes
  • Wednesday
    • 0830 ET: [USD] Core Durable Goods Orders
      • Forecast: 0.1%
      • Previous: 0.5%
    • 0830 ET: [USD] Initial Jobless Claims
      • Forecast: 225,000
      • Previous: 231,000
  • Thursday
    • All Day: [USD] Thanksgiving
    • All Day: [JPY] Workers Day
  • Friday
    • 0200 ET: [EUR] German Gross Domestic Product (GDP)
    • 0945 ET: [USD] Global Services Purchasing Managers Index (PMI)

Bitcoin Spice – Is the Bull Back?

Summary: Yesterday’s weekly close was the 5th weekly green candles, for a collective 40% gain at peak. Price remains below a key resistance, just under $40,000, with little changed from last week. Some call this the early stages of a bull market, others are looking for a pullback. We called for both last week, and saw that retrace to under $35,000 before rallying back $37,500 at the close.

Bitcoin Levels: Price currently occupies a value range between $30k and $40k, closer to bull market territory.

  • Immediate resistance: $37,078
  • Immediate support: $37,000
  • Current value range: $30,009 to $39,325
  • Support levels:
    • $37,000
    • ~$34,800
    • $33,000
    • 30,170
    • $29,379
    • $26,145
    • $25,100
    • $22,240
    • $20,981
  • Resistance levels:
    • $37,592
    • $37,993
    • $38,094
    • $40,400
    • $42,354
    • $46,967

Bull Perspective: This is virtually unchanged from last week. Price saw a brief retracement before rallying back to the upper $30s. The past week’s retracement was an opportunity to reset Open Interest (OI) and in the most bullish of uptrends we typically see price retrace to between the 38.2% and 23.6% fib retracement level. Less pronounced uptrends can still have healthy corrections as low as the 61.8% to 50% fib retracement levels. In the current trend, price retraced to around 20% before returning to $37k.

An argument could be made that closing the monthly chart over $30k signals the start of a bull market, especially as we also remain over the 20w SMA and 21w EMA, which generally signal rising bull sentiment. But this sentiment is likely aligned to the potential Bitcoin ETFs and if they are rejected or delays, may stifle short term bullish sentiment. From a technical perspective, the chart looks bullish, and the range between $30k and $40k is historically a heavy accumulation range; an ETF approval would be extra spice. If we retrace here, I prefer to see no lower than $33k, but prefer $34k or higher for support. To the upside, $38k is a key resistance and flipping it would be a very bullish signal.

Bear Perspective: The chart looks bullish, sentiment is rising – all positives. However, while a continued upside move is possible, its unlikely we see institutional money enter the market before the SEC issues a Bitcoin ETF. With that in mind, any moves beyond $30,000 and up to $40,000 could be short lived, if the ETFs are rejected or delayed, or the macro degrades further and Bitcoin is impacted.

Bottom line: Should you buy? Bitcoin remains at half of it’s previous high, and even a conservative growth of 3x this cycle means you have plenty of time to stack crypto. Don’t wait, develop a DCA strategy and begin to buy now before institutions do.

US Dollar Index (DXY)

The Dollar Index showed some short term strength through September, due to an indecisive but decidedly more hawkish US Fed, but that rally faded in October as market sentiment pivoted and now in November it’s clear that markets are forward looking to 2024, and the expectation of a reduction in rate hikes.

The US Dollar Index (DXY) continues a gradual retreat, after peaking in October at 107.113 on the back of “higher for longer” interest rates. But make no mistake, they are approaching the end state of this hiking cycle, its just a question of when. As such, the DXY is down nearly 3.5% in November.

While its not impossible to see the DXY rise again, if November closes under 106.6, we’ll see a proper lower high set, and the emergence of a downtrend, with a downside target of upper 90s possible in 2024. Key levels to monitor on DXY are closing the monthly over 106, or under 104.8, which would lend additional confirmation of either a longer rally, or impending downside towards the next key level around 101.

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.

Market Sentiment

While things look up from late last year, there remains a measure of uncertainty in the macroeconomic forecast, and regulatory climate. That said, it is clear the market sentiment is shifting, with growing confidence in the Bitcoin ETF approvals, and Ethereum following it in 2024, and with the worst of the bad news behind us in terms of bad players like FTX and the SBF trial.

We are currently oscillating around 69 (moderate greedy), with a high of 74 in Novemberthis is the highest sentiment has been since Q4 of 2021, nearly two years ago.

An ETF approval will 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.


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