FOMC Announcement Awaits Crypto Bulls

02.11.22 12:19 AM By Stormrake

There are only two meetings left in the 2022 FOMC calendar. Today will provide a signal whether there will be any relief in 2022 for risk assets. Should we get a light rate hike, a Christmas rally would definitely be on the cards.

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.

Carrot or Stick - JPow will decide

The RBA fired out a soft 25 bps rate hike whilst Australia gathered to watch a horse race. The rhetoric from RBA Governor, Philip Lowe was a lot stronger and created a rift between actions and words. This divergence between trying to talk markets down and having a soft rate hike caused the AUD to weaken and the ASX to catch a strong bid. Although the RBA never leads the FED in policy, it can give us an indication of what we can expect tonight. If FED chair, Jerome Powell comes out tonight with sub 75 bps and a strongly worded speech about continued rate hikes, we might just see the early signs of softening policy. We're not calling for a "FED Pivot" just yet as that may be premature but we're quite close to apex rates.

Altcoin Watch: GMX

Interactive chart: click on image for higher resolution

Lately we have been covering the Ethereum L2 landscape, where we have provided education on, "what is a layer 2?" and a potential Arbitrum token airdrop. All this research has given us an insight on which protocols and dApps have the best chance of capturing some value and attention. This brings us to GMX, the decentralised exchange that has the most on-chain activity on Arbitrum and accounts for more than 40% of its total value locked (TVL). Without having to expose oneself to the risks of bridging ETH assets over to Arbitrum, one could gain exposure to the ecosystem, through GMX exposure.

Diving into the technicals, the first key level comes in at $42.39, if we can close above this level we can anticipate a retest of $45.67. To the downside, if it closes below $40.85 then the next major level of support comes in at $38.05.

BTC/USD key levels

Bitcoin currently sits a few ticks below our pivotal key level of $20,554 USD and will likely get retested several times heading into the FOMC meeting. If we hold above this level, we can quickly shoot towards $21,761 as the first level of resistance, which if we manage to clear can have us track up to $22,794.

To the downside, if we close below $20,554 on the daily chart, we'll be anticipating a retest of our previous magnet area of $19,560. Losing $19,560 can have us spiking lower towards the local low of $18,161 before we find support.

ETH/USD key levels

Ethereum has hit a snag and now trades sideways, for it to continue its strong lift in prices, it will need to close above $1,664 USD. If it reclaims $1,664 then expect a strong push to $1,761 which provided a huge level of support until it broke down in mid June 2022. When support becomes resistance, from a technical perspective it's generally a pretty sticky area but if we clear $1,761 then its clear skies ahead.
To the downside, if we close below $1,555 then a retest of $1,472 cannot be ruled out. Losing the 2018 high of $1,472 can have us retest $1,333 if the downside momentum is strong enough. A severe sell-off is likely to come on the back of an aggressive rate hike out of the FOMC meeting.

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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