Macro Market overview
NASDAQ: Daily chart
BTC remains somewhat correlated to the NASDAQ in as much as the NASDAQ has been making a move to the upside since July. We have a higher high touching where the horizontal yellow trend line and the downward yellow trend line meet however, as you can see the market remains downward until we get back above 15209.65. It could drop back down to the long-term purple trend line dating back to 2009.
S&P500 weekly chart.
The S&P500 has been experiencing an upward move however, compared to historical pullbacks there remains some room for a downward move. Historically we can see that the S&P can experience 50% downward moves over a long period of time but currently it is one;y 33% down from the ATH. This move to the upside could be short lived given a V-shape recovery seems highly unlikely considering geo-political conditions.
Source: Tradingview.com: BTC weekly chart.
If you managed to enter the market in June when the wick reached down to $17k your portfolio could be in the green by 36%. Not a bad move and shows the value in a dollar cost average (DCA) approach to digital assets. Now is still not a bad price to dollar cost average into the market but having cash available to buy at expected lower levels remains a good strategy. The bear market is not over. Interest rate hikes in the US and the UK in the last week as central banks and governments attempt to reign in inflation could continue for a while longer.
Data source: TradingView. Bitcoin weekly chart.
So what will the market do?
Unless you have a crystal ball or insider knowledge, no one really knows. Although BTC has experienced an upward move, it hasn’t broken the yellow trend line and until BTC closes above $32k-$33k the market remains in a downtrend. September is historically a bad month for BTC so lower prices may happen. After the recent fed announcement regarding interest rates the market is buoyant but the September Fed announcement will most likely influence market sentiment straight afterwards.
Will the market follow the blue line or the white line? Longterm I think it follows the blue line but the short-term is anybody’s guess, however, considering the macro factors still at play, such as international conflicts, supply chain issues, interest rate hikes, continued inflationary challenges and recessionary effects the likely hood of a downturn in the market is not beyond the realm of reason. We remain bullish in the long run but uncertain in the short term. So, be careful out there.
Market Summary & Take aways
NASDAQ and the S&P are experiencing moves to the upside but these could end up being lower highs and forming new local peaks.
The particularly remains space to the right on the S&P500 for a larger move to the downside.
Although this is a good time to DCA anything under $20k for BTC is a far stronger pick up.
Until the market breaks above, closes and retests $32-$33k we remain in downward trend.
If BTC moves above $48k then we have strong confidence of bullish confirmation.
Spend more time out of the market than in the market.
This move to the upside is likely to move down in the coming weeks.