I think the next couple of weeks will be noisy, but I do think that it is only a matter of time before rallies get sold into.

The British pound went back and forth on Monday as we continue to look a bit lost. At this point, the market had initially tried to rally but then gave back those gains that show indecision. The British pound has been difficult to trade over the last week or so, but it is worth noting that we are in a severe downturn. The 1.22 level underneath is a short-term support level, but if we were to break down below there, it opens up the possibility of a move down to the 1.20 handle.

If we do break above the highs of the last couple of days, it’s likely that the market could go looking to the 1.24 handle, possibly even the 50-day EMA above. After that, the British pound will have to deal with a 1.26 level as a major resistance barrier, something that I think will be very difficult to break above. If we did clear that, then it’s possible that we could see this market go to the 1.30 handle, but that would be an extreme move to the upside that would also have me thinking about the possibility of a change in trend.

The most likely scenario is that we break through those couple of hammers that are based around the 1.22 handle, as the US dollar is by far the strongest currency in the world right now, as people are trying to find some type of safety. At this point, the market is likely to continue to see a lot of concern out there, so it’s likely that the US dollar continues to be chased. Furthermore, interest rates in America continue to rise, so it makes quite a bit of sense that the greenback continues to be attractive.

If we were to break down below the 1.20 level, then the British pound could start to drift much lower, perhaps dropping to the 1.18 level. After that, the British pound could drop to the 1.15 handle, in what would be a rather significant move. I think the next couple of weeks will be noisy, but I do think that it is only a matter of time before rallies get sold into, and that’s exactly how I will be looking at this market, one in which I will be fading rallies that show the first signs of exhaustion.

I continue to look at this as a “fade the rally” situation.

Bitcoin fell on Wednesday to reach the $20,000 level yet again. Ultimately, you should pay attention to the fact that we did of forming a bit of a shooting star during the previous session. At this point, if the market were to break down below the hammer from the candlestick before, then it’s likely that the market could go down to the $18,000 level. The Bitcoin market looks very sick, and I don’t think that changes anytime soon.

Alternately, if we were to break above the shooting star from the Tuesday session, that would be a bullish sign, as we would be breaking above the 22,000 level, perhaps trying to get to the $23,000 level. A break above that level then opens up a significant “bear market rally” that could go all the way to the 50 Day EMA. That currently sits near the $28,000 level, so therefore that could be where we end up on some type of bullish news. The biggest problem of course is that there is not much in the way of bullish news.

Looking at this chart, it remains a “sell on the rallies” type of situation, as the entire crypto area is going to continue to be toxic. After all, the risk appetite of traders around the world has been decimated, so there’s nobody out there willing to put a lot of money into the market on the whole. Bitcoin is the only chart that matters at this point, because if the market starts to rally, then possibly some of the smaller markets could start to rally as well. That being said though, I would need to see Bitcoin break above the $30,000 level on a weekly close to believe that the trend has changed.

The signal that the Bitcoin market may look for in order to start rallying is the Federal Reserve looking to change its tight monetary policy. If they do, then it’s possible that Bitcoin can recover. However, until that happens it’s very unlikely that Bitcoin has any real momentum. With that in mind, I continue to look at this as a “fade the rally” situation. If we break down below that $18,000 level, then $16,000 will be targeted, and eventually $12,000, which is my longer-term target.

I am simply waiting for some type of larger candlestick to give us an idea as to where we should be trading in which direction to use.

The Ethereum market initially rally during the trading session on Thursday but has given back gains to show signs of hesitation. By doing so, the market is likely to continue struggling right around the 200 Day EMA, which is also right on top of the 50 Day EMA. In other words, this is a market that does not understand where it wants to be at the moment. The $3000 level should continue to be an area of interest going forward, as it is a large, round, psychologically significant figure, and an area where we have seen buyers previously.

The Monday hammer is an area that you need to pay close attention to because it shows that the buyers were willing to step in and defend Ethereum. If we were to break down below the bottom of that candlestick, it would show a capitulation of the buyers. In that scenario, the market could send the market down to the $2750 level, and then possibly even the $2500 level. The $2500 level is an area that has been important more than once, so it is worth paying close attention to that area. If Ethereum breaks down below the $2500 level, then it is likely that we would see quite a bit of selling pressure to reach the $2000 level next.

On the upside, if we were to break above the highs of the last couple of candlesticks, that opens up a move to the $3250 level, and then the $3500 level. The $3500 level is an area that has been important previously as it was where the sellers came in to push Ethereum back down, so taking that would obviously be a very bullish sign. As things stand right now, this is a market that looks as if the buyers are trying to step in and support Ethereum after a dip, so the next couple of candlesticks could be very important. I do not necessarily believe that this is a market that is quite ready to make a bigger move, once it does it should be relatively obvious as to where we are going and how it is going to play out. With this, I am simply waiting for some type of larger candlestick to give us an idea as to where we should be trading in which direction to use.