Looking for opportunities to fit short-term rallies, 

• The AUD/USD pair has dropped during the Friday session to test the 0.69 level.
• This is a market that continues to be highly sensitive to the overall risk appetite around the world, which of course is waning.
• Pay close attention to is the fact that the Australian dollar is highly sensitive to the Chinese mainland economy, so therefore you need to keep in mind that everything that’s going on in China has a major influence here.
• The Chinese economy seems to be slowing down, and there are a lot of concerns about what’s going on over there.

If we break down below the lows of the trading session on Friday, I think it opens up the door to a move down to the 0.67 level. The 0.67 level has been important a couple of times, going back several years. If we break down below that level, then it opens up the possibility of a move to much lower levels. In that situation, I would fully anticipate that the market will go looking to reach the 0.65 level.

Change in Trend

On the alternate scenario, if we were to break above the 50 Day EMA, something that I don’t see happening very easily, the 0.70 level should be resistance, followed by the 200 Day EMA. The 200 Day EMA being broken to the upside could be thought of as a change in trend, but I would not hold my breath for that happening easily. We would need to see the US dollar loses strength across the board, although it must be noted that the Australian dollar has been a bit of an outlier when it comes to dealing with the greenback, as so many of the other currencies have done far worse than the Aussie.

I do think that this remains a “fade the rally” type of market, but that’s the same thing that you can say about most major currencies against the US dollar. As yields will almost certainly rise next week due to central bankers speaking at the Jackson Hole Symposium, I think this continues to put downward pressure on this market as the US dollar will remain King when money tightening policy continues to be the norm for most central banks. Because of this, I’m looking for opportunities to fit short-term rallies, but if we do break down below the Friday candlestick I would not hesitate to start shorting either.

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Expect a lot of choppy and nonsensical movement over the next several days.

• The GBP/USD currency pair broke down quite a bit Monday as we continue to see the US dollar strengthen against almost everything.
• The 50-day EMA is slicing right through the middle of the overall consolidation.
• It is probably only a matter of time before the British pound has to respect this one way or the other.

The 1.20 level underneath is an important area, and I think testing that is more likely than not going to cause a bit of noise, so I think we will have to see how that plays out. If we break down below the 1.20 level, then it’s likely that we will see this market break down to the 1.18 level. Breaking below the 1.18 level opens up the possibility of a much bigger move to the downside. In that scenario, I would anticipate seeing the US dollar strengthen against almost everything, not just the British pound.

Downtrend to Continue

Pay attention that the interest rate situation in the United States because rates continue to rise, which could send this market much lower. In fact, the market has been in a downtrend for quite some time, and I just don’t see that changing anytime soon. After all, we have seen a lot of strength in the greenback due to a worry about the global economy slowing down, which tends to bode well for the US dollar in general.

On the other hand, if we were to break above the 1.2250 level, then we could have the British pound looking to reach the 1.24 level. I think there is a significant amount of resistance all the way to the 1.26 level, and therefore it’s not until we break above there that I think the overall trend will change completely, and I think a lot of people would start to “FOMO” into this market. I don’t see that happening anytime soon, and therefore you need to be cautious about jumping “all in”, especially if you’re going to go to the upside as there is so much to work through to even make that happen. Ultimately, fading the rallies has worked and I think that will continue to be the case going forward. Expect a lot of choppy and nonsensical movement over the next several days.

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Look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market.

• Ethereum continues to look vulnerable as we have drifted lower yet again.
• Ethereum has recently seen a bit of abuse due to the idea of the upgrade coming in September, but whether or not that’s the case is totally irrelevant.
• There are a lot of moving pieces when it comes to the overall risk appetite of traders around the world, so you need to pay close attention to what’s going on in multiple markets. Risk appetite is so messy at the moment that you are going to have a serious issue looking for clues.

Will the Ethereum Rally?

Ethereum has no business rallying over the longer term, at least not until other safer assets start to attract attention as well. As long as we have so much in the way of uncertainty when it comes to that risk appetite, Ethereum and other crypto assets are going to continue to struggle. It’s worth noting that we reached the $1800 level, which is the beginning of a significant resistance barrier that extends all the way to the $2000 level. It’s not until we break above all of that that I think the trend itself has changed.

Notice how we had a nice shot higher for a couple of days, and then have done almost nothing. This tells us that the market will continue to be a little hesitant to continue going higher, and the fact that we pulled from the first signs of resistance also suggests to me that Ethereum is just not ready to go higher.

Underneath, the 50 Day EMA will offer a little bit of dynamic support, as it is starting to curl to the upside. The $1200 level underneath is the top of a consolidation area that extends all the way down to at least the $900 level. Ultimately, this is a market that has more likely than not put in some type of bottom, but if we were to break down below that area, then the market could fall apart. I think at this point in time we need to be very cautious about trading this market, but I do look at significant pullbacks as an opportunity to build up a larger position for a longer-term trade and a turnaround and start the next bullish market. Ultimately, every time we pull back there will be plenty of longer-term traders willing to get involved.

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This is a market that every time it rallies, there will be sellers.

Dogecoin is now hovering just above $0.05, and therefore it’s likely that we are eventually going back to even lower levels. It looks as if the market is trading back and forth in this area, which makes sense considering it is a bit of a psychological figure. That being said, it’s almost impossible to imagine that we are going to turn around and skyrocket anytime soon, due to the fact that the entire cryptocurrency world is falling apart.

This is a market that every time it rallies, there will be sellers. The market will have to pay close attention to the 50 Day EMA just above, which is at the $0.08 level. Ultimately, I just don’t see a scenario where this changes anytime soon, because even Bitcoin and Ethereum are struggling, so it is a real stretch of the imagination for meme coins to suddenly be hot again. This is one of those markets that you buy as people start piling into anything crypto-related, understanding that you need to get out before those same people realize it’s just a passing fad.

I have to question whether or not this project ever recovers, but even if it does, it’s going to be nowhere near as powerful as it once was. This was just simply people buying random crypto, based upon nothing but the hype on social media. Do not get me wrong, we will see something like this again because markets do tend to repeat themselves. Whether or not it’s crypto, or something else remains to be seen.

Regardless, do not be surprised at all to see this market drop below the $0.01 level, essentially becoming worthless. “Have fun staying poor” is something that Bitcoin traders have stopped saying online, so I can only imagine what the Dogecoin community is saying these days. Regardless, this is a market that continues to grind lower and I think is going to struggle to survive. In fact, it’s not until we break above the $0.20 level that I would start to look at it from the outside, which would be a 400% return from where we are. There are easier places to make money at this point in time. However, I suppose if you wanted to gamble a bit, you could always buy a handful of coins and put them away.

The best thing that can happen to Solana is getting rid of some of the dead weight in the crypto world.

The Solana market has pulled back a bit during the trading session on Thursday as we continue to see the market drift lower overall. The Solana market seems to be attracted to the $30 level, but when you look at support and resistance on longer-term charts, you will notice that the $50 level has been resistance, just as the $20 level had previously been important underneath.

The Solana market has taken a major nosedive with the rest of the crypto markets, and therefore I think you need to look to the bigger coins in order to determine where this market goes. At this point, most institutional money does not care about these other smaller projects, whether they are faster or slower than Ethereum is completely irrelevant. Yes, Solana is a major player in the improvement of crypto, but at the end of the day, it’s not much in the way of being investable currently.

If we do continue to go lower, I would anticipate that the $20 level should be worth paying close attention to, because if we break down below their Solana will fall apart. At that point, I would anticipate that the market will bang around and very low numbers and kill time until the rest of crypto can advance.

If that were to be the case, pay close attention to the Solana ecosystem, and all of the news coming out of it. After all, this is a market that needs some type of good news, plus we are in a situation where a lot of crypto markets may disappear permanently. It’s going to come down to whether or not a network is viable from a usage case standpoint at this point. The years of easy and cheap money flowing into the market are over with now, therefore crypto is going to have to stand on its own. It’s hard to imagine that crypto is suddenly going to take off to the upside without a certain amount of good news and real-life use. Quite frankly, most crypto is a solution looking for a problem, and we are about to see 90% of networks and coins disappear. This does not necessarily mean that Solana is in trouble, but a lot of crypto is. As long as that is going to be the case, the best thing that can happen to Solana is getting rid of some of the dead weight in the crypto world.

Look at rallies as a potential shorting opportunity.

Litecoin markets have fallen a bit during the trading session on Thursday to reach the $60 level. We have turned around to show signs of life since then, so it does suggest that Litecoin is going to try to bounce just a bit. Nonetheless, this is a market that is in a strong downturn, and I think at this point it is only a matter of time before we start shorting again.

The 50 Day EMA sits at the $90 level and is driving much lower. This is a market that continues to see a lot of downward pressure over the longer term, and I just don’t see how Litecoin takes off to the upside due to the fact that crypto in general is struggling. If we break down below the $60 level, that would show a huge move to the downside given enough time, perhaps reaching down to the $50 level. Regardless, even if we do break out from here, I’ll be looking for selling opportunities at higher levels.

Litecoin is essentially too far out on the risk spectrum to think that it can go anywhere without some of the more “common coins” rallying. Bitcoin and Ethereum both need to rally before Litecoin will for anything worthwhile. As long as crypto markets continue to struggle, Litecoin will follow right along with the rest of them. Oddly enough, Monero is the only one I’ve seen recently that has been strong enough to be interested in. At this point, there is nothing going on in the world of Litecoin that’s worth being bothered with.

I feel that the market is looking very much like the technology stocks in 1999, that we are starting to separate the useful coins from the useless ones. Back then, there were a whole host of overvalued technology stocks that caused a big crash. After that, we had some of the massive leaders in technology emerge. That’s probably what’s going to happen with Bitcoin and Ethereum, but anything farther out on the risk spectrum is still purely speculative. Whether or not Litecoin survives for the bigger move is a completely different question, but it certainly is at risk of falling apart and perhaps even going to zero, right along with many other altcoins. In the meantime, look at rallies as a potential shorting opportunity.

I believe at this point it is likely that we have to continue to fade rallies, perhaps shorting given enough time. 

The Bitcoin market fell rather hard on Wednesday as the $30,000 level has caused a bit of resistance. Ultimately, this is a market that looks as if it is likely to drop over the longer term. The market has a lot of resistance just above, and I think it does make sense that sellers jump in every time we get a little bit bullish. After all, this is a market that has failed miserably as of late and based on the action that we have seen over the last 24 hours, it looks like Bitcoin has further to go.

At this juncture, it looks like the market is going to go reaching towards the $25,000 level, but I think it has further to go than that. Fading rallies will continue to be the way going forward, and at this point, I just do not see a scenario where buying Bitcoin makes sense. The 50-day EMA currently is just below the $38,000 level and dropping rapidly. As crypto continues to get eviscerated, you should keep an eye on Bitcoin even if you are not trading it. It is not until Bitcoin can stabilize that the rest of the market will be able to. At this point, it does not look like it is going to happen anytime soon, so I think what we are going to see is a situation where buyers will have plenty of time to pick up value if and when it occurs.

We are entering “crypto winter” from what I can see, and below the $25,000 level would open up the possibility of a move down to the $20,000 level. After that, the whole thing comes unraveled. There have been a lot of scams exposed in the crypto markets as of late, and now we are even starting to see stable coins get hammered.

I believe at this point it is likely that we have to continue to fade rallies, perhaps shorting given enough time. The market continues to follow risk appetite in general, so it does make sense that the crypto markets fall right along with larger and more liquid markets such as the S&P 500, NASDAQ 100, and “risk on” currencies.

Pay attention to other crypto markets in general as they can give you a clue.

Litecoin initially tried to rally during the day on Thursday but then fell to reach the $107 level. The Litecoin market has been drifting lower for quite some time, and therefore it is not a huge surprise to see that we may be heading back to the $100 level. The $100 level had previously been a significant support level, and therefore you need to pay close attention to it. After all, it does seem to be a place of demand, but what I am concerned about is that the market has made lower highs since bouncing from that level.

Because of this, I think the market will continue to see a lot of noise, but if we break down below the $98 level, then it is very likely that we really start to unwind, and of course, Litecoin will be at the mercy of the overall crypto markets in general. It is worth noting that Bitcoin is struggling to bit, and as long as that is going to be the case, is very likely that the Litecoin market will do the same. After all, the Bitcoin market has an outsized influence on the overall crypto world, and as long as that is the case you have to keep both charts open if you are wanting to trade Litecoin.

On the upside, if we were to break above the 50 Day EMA that would be a good start, but that is up at the $119.13 level. After that, we then have the $125 level. The $125 level is a psychologically important figure, but we need to get above there to get things moving. I do think that we are more likely than not going to see a lot of noisy behavior, but that is something that you would expect in a market that is trying to curl higher.

The market has been in a downtrend for a long time, but we are still trying to at least consolidate, so therefore we are trying to figure out whether or not we are getting ready to recover, or if it is just simply a stop on the way to lower pricing. Risk appetite will have a huge effect on this market, as Litecoin is pretty far out on the risk spectrum. Keep this in mind, and pay attention to other markets in general as they can give you a clue.

In general, $20 will determine the overall health of this market.

Neo drifted lower on Friday as we continue to see negativity in this market. We are below the 50-day EMA, and now are threatening the $22 level. If we break down below the $22 level, then it is likely that we could go looking to reach down to the $20 level. The $20 level has been supported more than once, and it will be interesting to see whether or not it holds.

Keep in mind that Neo is far out on the risk spectrum, so you need to see an environment where people are willing to put money to work. Because of this, you need to pay close attention to stock markets, as well as currency markets. They can give you a bit of a “heads up” as to whether or not people are willing to put money into riskier assets such as Neo. The market recently had broken to the upside but then pulled back to show signs of hesitation. The fact that we have pulled back the way we have suggests that we are in fact going to go looking to reach the $20 level underneath.

It is also worth noting that we are closing at the very bottom of the candlestick, so it does suggest that we are going to drop further, due to the fact that traders are comfortable being short of the market heading into the close. That typically tells you that they are willing to hang on to the position, so it is likely that the market will simply follow right along with it.

If we were to turn around, the 50-day EMA offers resistance, and a break above there would be a bullish sign. At that point, I would anticipate that the market could go looking to the $30 level as a target, with the 200-day EMA racing towards it. Nonetheless, you need to pay attention to the larger crypto markets, because they can give us a sign as to where this market may go given enough time. Keep in mind that Neo should be approached with caution, as the market can be quite volatile. Nonetheless, it does look like Neo has enough buyers underneath that it might open up a possible range-bound trading situation. In general, $20 will determine the overall health of this market.

The attitude of markets has been fickle at best, so you need to be nimble and make sure that you have your trades sized appropriately.

The euro fell after initially trying to rally on Wednesday, as we continue to see plenty of downward pressure. The euro is suffering at the hands of interest rate differentials between Germany and the United States. Furthermore, the European Central Bank is very unlikely to see a reason to tighten monetary policy anytime soon, so I think this trend will continue.

The market has been in a downtrend for quite some time, and it is very likely that we will continue to see selling pressure on short-term rallies. The 50-day EMA is currently at the 1.1115 level and drifting lower. I think at this point it is only a matter of time before we see the 50-day EMA come into the picture and cause a bit of downward pressure. This is a market that I think will see plenty of reasons for the fall, but the 1.08 level underneath is an area that should be supported based on the recent bounce and the fact that it is at the top of the overall consolidation range.

We are getting a bit of an overextended condition here, so do not be surprised at all to see a bit of a bounce given enough time. In fact, early during the day, it looked like we were ready to do that. Looking at this chart, it is very likely that we will continue to bounce around between the 1.08 level underneath, and the 1.12 level on the top. I have no interest in buying this market, as the market is so negative. In fact, is not until we break above the 1.12 level that I would consider buying this market, and we would also have to see a complete turnaround in the attitude of the US dollar around the world.

The market will continue to be very noisy, but I would look at any bounce at this point as a potential value when it comes to purchasing the US dollar. With the FOMC minutes suggesting that the Federal Reserve was much more hawkish than originally thought, we should continue to see plenty of US dollar strength over the longer term. Nonetheless, the attitude of markets has been fickle at best, so you need to be nimble and make sure that you have your trades sized appropriately.