We are in the midst of “crypto winter”, so you should be aware of the fact that the market may be a little lackluster.

• The BTC/USD currency pair went back and forth on Wednesday as it looks like we are not quite ready to go anywhere.
• That being said, it’s worth noting that we have been consolidating rather tightly, so one would think that sooner or later we should get some type of momentum into this market.

Support at 50-Day EMA

Underneath, the 50-day EMA sits just below the $22,000 level, an area that has been important previously. The 50-day EMA should offer dynamic support, so if we were to break down below that level it’s likely that we would see Bitcoin go lower. In that scenario, I would anticipate that the market probably falls down to the $20,000 level. That’s an area that I think will attract a lot of attention, not only from a structural standpoint but also quite a bit of attention due to the psychology of that big figure.

On the other hand, if the market were to turn around a break above the $25,000 level, that would be very bullish for Bitcoin. In the short term, I could see this market going to the $28,000 level. The $20,000 level should be significant resistance, and I believe that resistance will extend all the way to the $32,000 level. If the $32,000 level was broken to the upside, it’s at that point that I think we would have entered a new bull run.

In the meantime, I anticipate a lot of choppy and sideways action, because there’s no real catalyst for Bitcoin to go higher. Ethereum does have a little bit of a catalyst, and that could cause a little bit of a knock-on effect over here, but I would not hold my breath for that. With the upgrades coming to the Ethereum network seemingly on time, we have seen Ethereum outperform Bitcoin. The market is likely to continue seeing noisy behavior, and you need to be cautious about your position sizing. However, if you are a longer-term trader, then you may look at each dip as a potential opportunity to pick up a bit of Bitcoin, and the anticipation of another bullish run. That being said, we are in the midst of “crypto winter”, so you should be aware of the fact that the market may be a little lackluster.

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The overall downtrend has not changed, despite the fact that the euro has been fighting.

• The EUR/USD currency pair rallied ever so slightly Monday as we continue to see a lot of noisy behavior.
• The market will respect the 1.03 level going forward, as it has multiple times.
• The question now is if we either break above there or finally pull back.
• At this point in time, it looks like the euro is still threatening the 1.03 level but cannot seem to get above there. In other words, I would not be surprised at all to see this market pullback from here, using the 1.01 level underneath that support.

Approaching Parity

If we were to break down below the 1.01 level, then it opens up the possibility of the euro going down to the parity level. The parity level is an area that will attract a lot of attention, and if we were to close below there on a daily candlestick, it’s likely that it would attract a lot of interest by algorithmic traders, which would then be forced to start shorting this market again. At that point, the market could go down to the 0.98 level, possibly even the 0.96 level after that.

The 50-day EMA is sitting just above the 1.04 level, which is an area that I think in and of itself will attract a lot of attention also. That’s an area that had been supported quite aggressively in the past, so the “market memory” in that area should come into this picture. The market bouncing from here could be a good thing for the short term, but it should only offer “cheap US dollars” going forward. I think at this point we are more likely than not to go into a more of a “fade the rally” scenario than anything else.

If we were to break above the 1.04 level, that would obviously be a very bullish sign, perhaps opening up the market to reaching the 1.06 level. I don’t see that happening very easily, but it is always a possibility. Pay attention to the 10 year yield, because it can give us an idea as to where the US dollar may or may not go. The overall downtrend has not changed, despite the fact that the euro has been fighting. Ultimately, we will continue to see a lot of demand for dollars over the longer term.

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It’s difficult to imagine a scenario where you can put a bunch of money into this market right now.

The gold markets initially fell during the trading session on Thursday but then turned around to show signs of life at the bottom of the consolidation area. This is a market that continues to see a lot of noisy behavior, and therefore it’s going to continue to be difficult to deal with until we get through the CPI figure at the very least, due to the fact that the markets are paying close attention to the idea of inflation in the United States, and the Consumer Price Index will give you a “heads-up” as to what the Federal Reserve may have to do to fight inflationary problems.

If we were to turn around and break down below the $1830 level, it opens up a move down to the $1800 level. The $1800 level coincides with the year of the trendline and therefore challenges the entirety of the uptrend. If we break down below there, then it’s likely that the market will fall apart and go much lower. On the other hand, if we were determined to show signs of life, and break above the 50 Day EMA, then it opens up the possibility of a move to the $1900 level, maybe even the $2000 level. Ultimately, this is a market that I think will continue to be noisy, and difficult to manage until we get a little bit of clarity, and perhaps more importantly, momentum.

The next couple of days will probably have a lot to do with where we go next, and at this point, it’s likely that we should see volatility, but it does look like we are trying to compress enough to get momentum into this market and go higher or lower. Keep in mind that the bond markets are trying to price the idea of a more hawkish Federal Reserve, meaning that they are expecting that the CPI numbers will be hotter than anticipated.

I suspect that by the end of the day Friday, we may have a bit of clarity going forward. Until that happens, until we break out of this little box that we are in, it’s difficult to imagine a scenario where you can put a bunch of money into this market. Ultimately, gold markets are going to be heavily influenced by bond yields in America, and of course any comments coming on the Federal Reserve.

It is not until we break above the $40,000 level that I would become bullish.

Bitcoin rallied a bit on Monday as we continue to hang around the $30,000 level. The Bitcoin market has been very quiet over the last week or so, but I do believe that it is only a matter of time before we see some type of an attempt to recover. Any recovery rally at this point would be an opportunity to start shorting because the Federal Reserve will continue to be very hawkish and tight with its monetary policy. Furthermore, the 50-day EMA is dropping below the $37,000 level.

On the other hand, if we break down below the hammer from last week, that could open up a significant amount of selling pressure, as the $25,000 level will continue to be important, and perhaps even the target. If we were to break down below the $25,000 level, it would spell the end of Bitcoin in the short term. In that general vicinity, I would anticipate a massive selloff.

If we were to break down below the $25,000 level, then it is likely that we could go reaching to the $20,000 level. If the market breaks down below that level, it would open up a “crypto winter.” This very well could be what happens next, because there is nothing fundamental to make Bitcoin rally at this point. The market has held steady for a couple of weeks, but at this point that is about the best thing you can say.

Longer term, I think that Bitcoin will be bought again, but I think you will also get an opportunity to buy at much lower levels. If you are a longer-term believer in Bitcoin, then you could dip your toe in it occasionally, building up a position in little bits and pieces. The market certainly has a lot to fight through, and all of the fraud that is suddenly being exposed in the crypto markets will continue to weigh upon all assets. Bitcoin is the first place where people put money to work, and it is also the first place where people start to pull money out of. Rallies at this point continue to be selling opportunities, especially if you can easily short Bitcoin via CFD markets or leverage. In fact, it is not until we break above the $40,000 level that I would become bullish.

If you are a short-term range-bound trader, you can use those two levels as a bit of a guideline as to where to go long or short.

The German index has gone back and forth during the trading session on Thursday, as we continue to dance around just above the €14,000 level, in fact, it appears that we are stuck between the €14,000 level on the bottom, and the €14,250 level on the top. With these last couple of sessions being back and forth, it suggests that we are going to continue to see a lot of noisy behavior, and therefore it is going to be very difficult to trade this market with any type of certainty.

In the meantime, if you are a short-term range-bound trader, you can use those two levels as a bit of a guideline as to where to go long or short. That being said, if we do break out above the resistance barrier, the next resistance barrier will be the 50 Day EMA which is currently at the €14,476 level. On the downside, if we were to break down below the lows from a couple of candlesticks ago, then the market could start to drop again.

When you look at the chart, you can see that we have obviously bounced rather significantly, and then pulled back. The question is whether or not the recent pullback has been a simple pullback in a potential longer-term uptrend, or the downtrend is going to continue? When you look at the fundamental outlook for the European Union, one would have to think that it is very difficult to believe that the energy crisis that is almost imminent will not be factored into this picture.

If we do break down below the hammer from a couple of sessions previous, then I think it is very likely we go looking to target the €13,500 level, perhaps even down to the €13,000 level. Furthermore, the 50 Day EMA is negative sloping, and therefore when you look at it from a trend following perspective, it is very possibly still looking bleak. The one thing that looks possible as far as bullish trading is concerned is that we could be forming a “falling wedge”, but it would need to break higher to kick that trade signal. As things stand right now, a breakout from the 250-point range is necessary before a bigger trade can be remotely close to being triggered anytime down the road.