We are going to continue to see a lot of bullish pressure on the US dollar, which it works against the value of Bitcoin.

• The BTC/USD currency pair did very little as far as upward mobility is concerned over the course of the last several days.
• While Friday did look a bit more bullish than the previous sessions, the reality is that the market has a lot of work to do before it becomes remotely positive.
• Because of this, I still feel that we have plenty of time to get long of this market assuming that we even want to be.

Volatility Likely Amid Aimslessness

The Bitcoin market is hovering around the $23,000 level, which is an area of some interest, but at the end of the day, we are essentially going back and forth and trying to find some type of directionality. The market gave up most of the gain for the day anyway, so it looks to me as if the market is going to continue to see a lot of volatility more than anything else, and even if we were in the process of trying to build up a bit of an accumulation phase, the market has a lot to do convince everybody to get long.

As jobs numbers came out hotter than anticipated Friday, interest rates in the United States spiked. This suggests that we are going to continue to see a lot of bullish pressure on the US dollar, which it works against the value of Bitcoin. Ultimately, the 50-day EMA underneath should offer a significant amount of support. The $20,000 level underneath there is an area that I think a lot of people will pay close attention to, as it is a large, round, psychologically significant figure, and could lead to even more selling pressure to the downside. If we were to break it down below there, it opens up the possibility of Bitcoin going down to the $12,000 level. The $12,000 level would be an area that a lot of people will be paying close attention to.

On the other hand, if we can break above the $25,000 level, it’s possible that we could go to the $28,000 level above. Between the $28,000 level in the $32,000 level, I expect to see a lot of resistance and therefore think it’s going to be very difficult to get above any time soon. If we were to do that, it would change the overall trend.

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Ultimately, this market goes lower.

• Ethereum was very quiet on Wednesday as with very little in the way of momentum. 
• The market has been consolidating for a while
• We are going to simply trade back and forth between the $1250 level above, and the $900 level underneath.
• As the market continues to go back and forth, it looks as if we are either trying to build a bit of a base, or we are getting ready for the next leg lower.

The Next Leg Lower

At this point, I suspect that the next leg lower is probably going to be the most likely outcome. Because of this, the market is more apt to simply grind away until we get some type of fundamental reason to get moving. If we were to break down below the $900 level, then it opens up the possibility of a move down to the $500 level. The market could get down there rather quickly on some type of bad news, not the least of which would be a strengthening US dollar which seems to be all but a formality at this point.

If we were to break above the $1250 level, then it’s possible that we could go to the 50-day EMA which currently sits at the $1500 level. After that, the $1750 level is the next target, which we have broken down from. I highly doubt that we can get above there, and I think that as long as we have a strengthening US dollar and a tightening Federal Reserve, it’s difficult to imagine that some of these more risk appetite-sensitive assets will do well. In fact, Ethereum is going to get smoked as long as money is not willing to take a significant amount of risk as this is about as risky as it gets for most institutions.

Fading rallies continue to work from what I can see, especially as Ethereum 2.0 drags on, as we have no real catalyst for the market to go higher. However, the Federal Reserve will eventually change its tune, and when it starts to talk about loosening monetary policy, it’s at that point that crypto, and by extension Ethereum, could get a bit of a push to the upside. Ultimately, this market goes lower.

It’s difficult to get bullish on this pair anytime soon.

The euro initially tried to rally against the US dollar during Monday trading, but gave back almost all of the gains in yet another sign of weakness. Monday was Independence Day in the United States, so obviously volume was a major issue. The fact that the euro could not capitalize on the lack of American trading probably says more than I ever could about the overall direction of this market.

Bond yields in America continue to climb and outperform the European Union. Because of this, the pair is more likely than not to continue going lower. I will continue to fade rallies, as I see so much in the way of noise above. The 1.06 level looks to be extraordinarily resistive, while the 1.08 level is essentially the “ceiling in the market” at the moment. We would have to break through all of that for me to start to explore the idea of a trend change.

On the downside, the market clearly has been negative for some time, and we have broken through the bottom of the 1.04 level couple of times, so if we were to make a “lower low”, that would be nothing but negative for the euro going forward. I do believe this will happen given enough time, with the euro looking to reach the 1.02 level, followed by the parity level sometime later this summer. With the ECB doing everything it can to keep the economy limping along, it’s very unlikely they will be able to do more than a token interest rate hike or two. At this point, the consensus is that they may do 50 basis points. On the other side of the equation, you have the Federal Reserve which hass already promised yet another 100 basis point rate hike, so it will continue to make US bonds much more attractive, most certainly above the European Union.

Ultimately, the direction of this pair is probably in the hands of the Federal Reserve than anybody else, but we also have external factors such as the war in Ukraine, the lack of energy in Europe, and the fact that there is such a huge dichotomy between all of the member states as far as where they are economically. With that in mind, it’s difficult to get bullish on this pair anytime soon.

Ultimately, this is a market that has more working against it than for it, and that is something that you will have to keep in the back of your mind.

The S&P 500 gapped a little bit lower to kick off the trading session on Wednesday, only to bounce significantly. However, the market could not hang on to the gains so it looks as if we have further to go to the downside. We are currently sitting on top of a significant support level just above the 4100 level, and I think that it will more than likely try to break through there rather soon. If and when it does, this is a market that is ready to go ripping lower. 4000 would be very likely at that point because this is a market that is facing an uphill battle all the way around.

Inflation numbers continue to suggest that the economy is in trouble, not that the stock market has anything to do with the economy. It is about liquidity coming out of the Federal Reserve or the other central banks, and that is disappearing. This is why you see stock markets rise when the economy is in bad shape, because people can borrow cheap money and gamble with it on Wall Street. However, now that the Federal Reserve looks likely to turn off the spigot, there is an entire generation of traders on Wall Street who have no idea what to do with this information. This has a lot to do with what we are seeing currently, and it does suggest further pain ahead.

If we were to turn around and take out the 4300 level to the upside, I might be convinced to start thinking about going long. There is nothing on this chart to suggest that is going to happen anytime soon, but it should be noted that a lot of times you get these nasty rallies in a bear market that can give you massive headaches if you are on the wrong side of it.

At this point, any rally looks like it is going to be a selling opportunity, and I do not think that is changing anytime soon. With this in mind, I am more apt to be a seller of signs of exhaustion than I am to get involved in this market and try to pick things up again. Ultimately, this is a market that has more working against it than for it, and that is something that you will have to keep in the back of your mind.