Despite incredible intra-day volatility across crypto and equity markets, nothing has actually happened and we remain locked in at key levels. Let's see what catalysts can actually provide the markets with some direction.
The information contained here is for general information only. It should not be taken as constituting financial advice. Stormrake is not a financial adviser. You should consider seeking independent financial advice prior to making any personal investments.
US inflation - a nothing burger
The headline and core inflation prints coming out of the US were supposed to break us out of a mind numbing range. Instead, all that we saw was some incredible intra-day volatility and ended up at the exact same price we started at for the day. This is good for those who are looking at long dated volatility plays as Bitcoin price remains quite contracted on higher timeframes (daily, weekly). Inversely, it doesn't serve well day traders, who for the most part got quite a beating in the choppy price action, ending the day with over $300M USD in total liquidations. Both bears and bulls got punished, as the wicks to the downside crunched the bulls, then the almighty reversal smashed the bears.
This is one of the main reasons why we advocate and provide spot only execution services for our clients, as only the most seasoned and experienced investors should consider leverage. To keep it simple, stack sats and convert fiat into your favourite digital assets but leave the leverage to the professionals.
Show Me the Green
To really drive home how impressive the reversal was on the back of hotter than expected inflation prints, the heat map for US stocks paints quite a clear picture. As always, we advise caution for our fellow raging bulls, as going up on bad news tends to be a bull trap. However, it would be foolish not to explore some cautious bids as the market is showing some real strength. The main objective at this stage is to survive, the consensus amongst institutions and their record PUT volume, is to expect more pain.
Especially as there is over 400bps spread between headline inflation and the FED funds rate, historically the funds rate needs to exceed inflation rate prior to any sort of loose monetary policy. For now, we can enjoy the hard earned green the market has provided us.
Especially as there is over 400bps spread between headline inflation and the FED funds rate, historically the funds rate needs to exceed inflation rate prior to any sort of loose monetary policy. For now, we can enjoy the hard earned green the market has provided us.
BTC/USD key levels
We had seen a touch of weakness heading into the CPI report and a quick sell-off on the numbers coming through. The reversal we have seen was in line with the strength coming out of equities. Despite all of this price action, we're right back to the magnet of all levels - $19,560 USD. Currently providing some slight overhead resistance, if we get a close above this level, then expect a sharp move towards $20,554. Our support level of $18,549 was breached but has still held true. If we close below $18,549 on the daily timeframe, expect a sell-off to retest the local lows of $17,647.
ETH/USD key levels
Ethereum continues it's sideways trajectory despite the short intra-day volatility. The magnet that is $1,333 USD still holds true, currently providing some overhead resistance, where if we break and close above then we can retest $1,400. To the downside, if we lose $1,241 then a retest of the local low that was set at $1,190.
No Advice Warning
The information in this newsletter is general only. It should not be taken as constituting professional advice from the author - Stormrake PTY LTD.
Stormrake is not a financial adviser and does not provide financial product advice. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your unique circumstances. Stormrake is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by this newsletter.
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