Macro Market Analysis
Nasdaq monthly chart
S&P monthly chart
Nasdaq observations:
Has not broken the longterm upward trend line dating back to 2009.
Held the horizontal local macro support of 11442.32
Is fighting to move above but also needs to close above the yellow horizontal resistance of 13195.08 but as this is a monthly chart it won’t happen soon. There is no rush.
S&P observations:
Only dropped 32% when closer to 50% was anticipated. It’s not out of the woods yet but it is looking stronger.
It has not yet broken and closed above the local resistance of 4145.09. If it can close above this that will be a sign of strength but if not then there could be a move to the downside.
What is interesting to me is the little yellow circle on both the NASDAQ and S&P500 chart. I’ve highlighted these because there is confluence with the longterm upward trend and market support levels in April 2023. Could this mean we are moving toward something significant in or after Q1 of 2023? Let’s wait and see.
DXY weekly chart.
GBPUSD weekly chart
Since January 2022 the dollar as been moving upward at pace with other currencies diminishing in value against the dollar. The longterm upward trend line show the dollars strength since the financial crash of 2008.
The move to the upside is now retesting 109 and if it breaks it could go as high as 120 which has not been seen since 2002!
When the dollar moves up, BTC moves down. Keep this in mind however, it won’t move up forever.
Longterm trend line shows GBP declining against the dollar since 1971 (say no more).
Since the 07/08 financial crash the GBP has continued to decline and never regained strength. The question with GBP is how low will it go? Will it touch 1.14 or go to the all time lows of 1.04? For GBP to put in a higher high it needs to move above £1.42 to the dollar! Big move and the UK will need some serious GDP for that to happen.
Most importantly, what about Bitcoin?
BTC Daily chart created on the 19th August!
I conducted this TA on the 19th August so quite pleased with the initial movement to the downside although the initial accuracy will most likely be negated with the next moves.
What can we see on this chart?
Long purple trend line dating back to December 2018 touching the current lows. You will see if passes through the covid-19 black swan event of March 2020. The more touch points on a trend line = a more accurate trend line.
Two green horizontal market peaks. The first being the 2017 BTC cycle peak of $19.5k (ish) and the second being a mid-cycle 2019 BTC peak of $14k. These are important trend lines. You can see BTC is forming a strong support base around the 2017 peak prices which will either continue to act as strong support or may turn into resistance if it drops below.
Short blue horizontal line marking 44 days till the end of September. Why? Historically September is more often than not a red month for BTC but that doesn’t mean it has to be the case in 2022. However, given wider macro conditions it would be exceptional if it turned into a significant green month. 44 days signals, there is no rush. Just because there are daily moves up or down it is important for investors not get sucked in and act on FOMO emotions.
Pink downward trend touching the lows shows the market remains bearish with lower lows continuing. This trend line touches the $12.5k price point around 44 days. However, exact price and timing are very difficult to get exactly.
The price box runs between the purple support trend line and the 2019 market cycle peak which is a range of $14k - $21k. The white line illustrating a possible move to the downside.
The yellow line illustrating a potential move depending on holding the longterm trend line.
Why could this be helpful?
The market remains uncertain in the short to medium term (remember, we are long-term bullish on BTC). This is about finding the best entry points for BTC.
If the macro picture begins to move toward a variety of changes such as… (there are quite a few as you well know) then BTC is more likely to continue on the longterm trend line. If the below markers continue to be bearish then a move to the downside becomes more likely.
Inflation eases. USA FED inflation reports a small decline. Many are bullish that this is the end of increased inflation and therefore potential for the FED to turn dovish however, some analysts argue that to get inflation under control interest rates need to match inflation! If so, it’s going to get messy. Citi Bank is predicting 18% inflation for the Uk in 2023 which is on the higher end of the spectrum but still.
The UK and US avoid recession (Highly unlikely in my view). UK GDP dipped to 0.1% signalling possible recession. Bank of England are anticipating a Uk recession by the end of 2022 /start of 2023 and for the recession to last for 12 - 18 months
Interest rates flip
National debt to GDP ratio decreases
International conflicts resolve
Strike negotiations are resolved.
Energy cost crisis is resolved.