The ETH/USD has dipped a little bit during the trading session on Wednesday but found buyers on the dip to continue to hang around the 50 Day EMA. It looks as if we are trying to form a little bit of a short-term base, and whether or not we can take off from here is still open for debate.

If we break down below the $1500 level, then it opens up more selling pressure for the Ethereum market, perhaps opening up a move all the way down to the $1200 level. The $1200 level is the top of a previous consolidation area, so there should be a little bit of “market memory” in that area. Breaking down below that level then opens up the possibility of a move down to the $900 level.

Waiting for “The Merge”

• The Ethereum market is a little bit different than some of the other crypto markets right now because we do have “The Merge” coming in the next several weeks, but it’s also worth noting that the market will continue to see a lot of questions when it comes to risk appetite in general.
• Even though Ethereum is probably going to be quite strong over the longer term, there is a lot of institutional money out there that is not willing to put a lot of risk on right now.
• Furthermore, it’s obvious that there is a bit of a ceiling in the market near the $2000 level, especially now that the 200 Day EMA is sitting in that same general vicinity.

Speaking of the $2000 level, if we were to break above there, then is very likely that we would enter a new bullish phase, sending this market much higher. In that general vicinity, I think that you would see a lot of money go flying into this market. Alternately, if we do break down from here, we could see the Ethereum drop all the way down to the $400 level. This would go in line with the Bitcoin market breaking down, which looks like it could. I recognize that we have “The Merge” coming in the next couple of weeks, but it would not be the first time that we have seen a “by the news, sell the announcement” type of trade work itself into the marketplace.

Ready to trade ETH/USD? Here’s a list of some of the best crypto brokers to check out.

I anticipate that we will have another move lower just waiting to happen in this messy and very negative environment.

The S&P 500 Index itself was closed Monday, but the futures markets were open for limited off-hour trading. That being said, the futures markets gave us a little in the way of direction but when you look at the S&P 500 index itself, you can start to see that the market is trying to build a base for the upcoming Non-Farm Payroll announcement on Friday. In this scenario, the market may try to rally and reach toward the 50-day EMA.

Do not be surprised at all if that happens, and quite frankly I think that opens up a nice selling opportunity. The 50-day EMA sits right around the psychologically and structurally important 4000 level, an area that will attract a lot of attention. Even if we were to break above there, I see even more resistance at the 4200 level, where we had sold off quite drastically before. In this scenario, it’s easy to simply sit on the sidelines and wait for signs of exhaustion to jump all over.

The alternate scenario is that we will turn around and break down below the 3700 level, which opens up an attack on the 3600 level, followed by 3500 level. In that scenario, we would simply be continuing the overall negativity that we have seen in the market for some time, something that makes a lot of sense. However, a lot of participants will probably be waiting to get the Friday announcement out of the way before putting more money in the market, mainly due to the fact that the Federal Reserve now has to start paying close attention to employment figures.

Inflation still runs hot, and the Fed is expected to raise interest rates by at least 100 basis points over the next couple of meetings, and furthermore, companies around the S&P 500 are going to have to start writing down estimates, as the economy slows. If that’s going to continue to be the case, there are plenty of headwinds for this market, and I do not think that we can turn around enough to break above that 4200 level. Given enough time, I anticipate that we will have another move lower just waiting to happen in this messy and very negative environment.

EOS initially fell a bit on Tuesday but found a little bit of buying pressure near the $1.30 level. The reality isn’t so much that EOS is something that is suddenly in demand, it has more to do with the fact that Bitcoin has balanced the bed. Remember, there is always a significant influence on the smaller markets when Bitcoin moves, so I think this is probably more or less EOS pretending like it’s going to build a base.

Having said that, the market has fallen so far that it would make sense to get a bit of a bounce. The market is still down for the session but at least it hasn’t made a fresh low. The $1.50 level above will more likely than not be somewhat difficult to overcome, but if we can, the market could make a move toward the 50 -dEMA. After that, then EOS has the possibility of going to the $2.00 level.

The biggest problem with this is the fact that crypto is in shambles, and the risk appetite of traders around the world has just been annihilated. It’s difficult to imagine that EOS will take off to the upside for any significant move unless of course people are willing to put a lot of money into risky assets, and EOS is pretty far out on that spectrum. More likely than not, your best case scenario is going to be that the market goes back and forth in this general area and kills a little bit of time.

If we break down below the $1.25 level, that will open up a bit of a “trapdoor” for EOS to continue falling. At that point, there is not much that’s going to stop it from dropping down to a value of $1.00 initially, and then more likely than not, much lower than that. Keep in mind that the value of the US dollar continues to climb over the longer term so that in and of itself will have a significant effect on what happens in this market, as all prices are quoted in those same US dollars. Crypto has a serious problem right now, so unless you are a longer-term investor that is trying to build up a huge position, there’s no point in buying anything.

It comes down to timeframe at this point.

Bitcoin rallied a bit on Monday, as it looks like we are trying to build enough support for a base. That being said, the market is still very much in a consolidation area, so it’ll be interesting to see if we can continue going higher. It’s probably worth noting that the market has been beaten down rather hard and for good reason. Crypto has a fraud problem that’s being exposed, and even though it’s not necessarily based around Bitcoin, it has people running from everything.

When you look at the last couple of weeks, you can see clearly that we are consolidating. However, the last time we were consolidating like this we were near the $40,000 level before the bottom fell out. That resulted in a 25% drop, so you can’t simply jump into Bitcoin and buy with both hands. At this point, I think we are about to make a pretty big move, but I don’t know the direction quite yet.

If history is any indication, it’s likely that we will go lower rather than higher. If we break down below the $28,000 level, I suspect that we are going to drop down to the $25,000 level, possibly even as low as $20,000. With all of the negativity around the crypto markets right now, it would not surprise me at all, and would probably drag the rest of the crypto markets down with it. Because of this, I would not only start shorting Bitcoin, but I would probably jump all over the smaller altcoins as well. In this environment, the best rate in crypto is to short smaller markets, as they stand no real chance.

Think of Bitcoin as the bellwether for the entire crypto market, and it’s not until we break above the 200-day EMA that you can technically say that we are in an uptrend. That is currently at $41,000. Bitcoin and the rest of crypto look miserable right now, so if you have the opportunity to take advantage of falling prices, that’s what would be the most profitable route. However, if you’re more of an investor, you could start to build up small bits and pieces of a larger position, understanding that it may be a few years before those positions pay off. It comes down to timeframe at this point.

Long gone are the 20% gains that we used to see in the day, and at this point, it is difficult for Bitcoin to gain 10% on a particular day. 

The Bitcoin market initially fell on Monday but found enough support to stabilize near the $30,500 level. That being said, the market is more likely than not going to continue to be skittish at best, and I do think that any rally at this point is probably just a sign of more consolidation going forward than anything else.

The $37,500 level underneath is a significant support level from the short term, as we have been grinding sideways for a while. However, even though the last couple of months have been slightly more positive every time we bounce, this last move was a little less impressive. Keep in mind that we ended up forming a shooting star right at the 50-day EMA, which is not a good look at all.

If we break it down below the $37,500 level, I think it signifies that Bitcoin is going to go quite a bit lower. At that juncture, $35,000 will be tested, and then possibly the $30,000 level. I do recognize that there are a lot of moving pieces out there, but right now the most important piece is going to be risk appetite. If risk appetite continues to deteriorate, there is no way in which Bitcoin will rally as it is so far out on the risk spectrum.

Remember, a lot of institutional money has flown into this market over the last couple of years, so this market will start to look very much like a mature market. In other words, people are only buying when they feel comfortable doing so, and the big players are now institutional funds, not retailers, who are willing to go “YOLO” every time they get a chance. I suspect that it is probably only a matter of time before a lot of retail leaves the space altogether.

Long gone are the 20% gains that we used to see in the day, and at this point, it is difficult for Bitcoin to gain 10% on a particular day. The volatility of the asset needs to drop for widespread adoption, and most certainly drop to have institutional money comfortable flowing into it. It is because of this that I think the longer we go sideways, the better it will be for the asset. However, if we break below the $35,000 level, things will be quite ugly.

I think that selling is all but impossible until we break down below the hammer.

The US dollar rallied significantly on Wednesday to break above the top of the hammer from the previous session, suggesting that we are in fact trying to recover overall. The market continues to hang about the 1.25 handle, which is a large, round, psychologically significant figure, and an area where we have seen a bounce previously. Because of this, I think it is more likely than not that we are going to see an attempt to stay within the longer-term consolidation area.

Another thing that helps the idea of this going higher is the fact that the FOMC Meeting Minutes were a bit more hawkish than a lot of traders had anticipated, and we have seen a spike in the US dollar overall during the trading session. Furthermore, the crude oil markets have broken down rather significantly as a surprise inventory builds and a softening of demand for gasoline has come into the picture as well. Looking at this chart, it is likely that if we can break above the top of the candlestick for the trading session on Wednesday that could open up a move to the 50-day EMA, perhaps even as high as the 1.28 level over the longer term.

The alternate scenario is that we will turn around and break down below the 1.24 handle, which would be a breakdown of the hammer that we had just formed. If you break down below the hammer, then it is going to be very negative for the US dollar, and we could see a spike in the value of the Canadian dollar. Because of this, I think is very likely that the selling pressure would pick up drastically and it could speed up.

That being said, when you look at the candlesticks over the last couple of weeks, we have seen the real body of each candlestick trend, and now we are starting to swing in the opposite direction. The explosive move during the trading session on Wednesday could be the beginning of a complete recovery, but obviously, it is going to take some time to determine whether or not that is going to be the case. Because of this, I think that selling is all but impossible until we break down below the hammer.

I am leaning more towards a bounce than any type of breakdown.

The US dollar initially dipped lower to kick off the Friday session against the Canadian dollar but then turned around to show signs of life again. By doing so, it looks as if the market is trying to hang on to the 1.25 handle, an area that has been important multiple times. This is the bottom of the overall range, so it is very interesting to see that we have bounced from here. By doing so, it will be interesting to see whether or not we can continue to go higher.

Keep in mind that the crude oil market is currently testing a major uptrend line, so if it breaks down that could be reason enough for this market to go higher given enough time. The 200-day EMA sits at the 1.2636 level, and it will attract a certain amount of attention. The market has been going back and forth for quite some time, so I do think that it is probably only a matter of time before we continue the pattern. However, that assumes that the US dollar strengthens in general.

Alternately, if we were to break down below the hammer from Wednesday, it could open up a big move to the downside, as it would be a major breakdown through the support. At this point, the market will more than likely open up a bigger move lower. This could be accompanied by oil rallying, but at this point, you can also make the argument that this pair completely ignored the oil market when it was bullish.

The 50-day EMA looks as if it is ready to break down below the 200-day EMA, forming the “death cross”, but it is coming from a very sideways neutral position, so I do not read as much into it. The market could very well bounce all the way to the 1.28 handle, which is the top of this overall consolidation. The market will continue to be very noisy, but it does look as if we are running out of downward momentum. Because of this, I am leaning more towards a bounce than any type of breakdown. Expect choppy behavior, but we have a couple of clear areas to pay attention to in this pair.

Sterling remained weak against the euro, dollar, and other currencies early this week after Bank of England Governor Andrew Bailey reminded financial markets of what is increasingly an uncertain bank rate outlook. Sterling was healing wounds after coming under pressure following earlier comments from Bank of England Governor Andrew Bailey in a discussion on macroeconomics and financial stability at Bruegel, an economic policy think tank. In the case of the GBP/USD currency pair, it retreated to the support level of 1.3051 before settling around the 1.3100 level at the time of writing the analysis.

Bank of England Governor Bailey said the significant pressure on income from recent increases in the prices of commodities and other commodities is on par with what we have seen in any one year from the 1970s and stated that this could reduce the extent to which interest rate hikes are needed further. “We are facing a very big shock by all historical standards,” he said. We’ve got a pretty big trade-off between inflation, production and activity, with the two moving in opposite directions. And “there is a very high level of uncertainty.”

He added, “The point I want to make here is that in these circumstances, forward-looking policy guidance should be aware of the uncertainty we face and the risks we face, and with that really in mind, we changed our language in our last meeting to state that more Of modest emphasis it may be appropriate ‘instead of’ is likely to be fitting ‘as we have used before’.

While expectations for the bank rate were later dampened following the Bank of England’s March policy statement, pricing in the swap market (OIS) still implied on Monday that another increase in the bank rate from 0.75% to 1% is uncertain. “There is only one expectation that I can safely make and that is that there will be a meeting in May,” the governor added.

Financial market prices also envisage a bank rate hike to 2 per cent or more before the end of the year, an assumption that will likely be pressure tested in the near future if the BoE’s latest language and the governor’s comments on Monday are anything to follow. The Bank of England said on March 17 that inflation was likely to reach 8% by April and warned that this could dampen demand from some parts of the economy, while Governor Bailey said on Monday that this dynamic could eventually reduce domestically produced inflation.

Governor Bailey’s recent comments and BoE language mean that the next round of economic forecasts will be doubly important, especially whether or not inflation drops further below the 2% target at the end of the forecast horizon. The latter could lead to commodity pressure on income being seen as a proxy for some of the interest rate hikes that have all been transferred to the bank by the markets recently, and that will be why each of the BoE’s upcoming policy decisions poses two-sided risks to the pound.

According to the technical analysis of the pair: On the daily chart, the price of the GBPUSD currency pair has turned bearish. The opposite bearish channel may appear clearly with the breach of the 1.3000 psychological support, which may bring the bears more movement to the bottom. Therefore, the next most important support levels may be 1.2920 and 1.2800 on the straight. On the other hand, there will not be a strong and continuous bullish momentum without the bulls moving towards the 1.3335 resistance. Today, the currency pair will be affected by the announcement of the growth rate of the US economy and the number of US non-farm payrolls from ADP.