The BTC/USD has been very quiet during the trading session on Tuesday as we continue to hang around the $21,000 region. At this point, the market is likely to see a bit of hesitation until we get through the Jackson Hole Symposium. This is because various central bank speakers will be bloviating on what they are going to do next, in the fight against inflation. While many crypto traders have no idea, the reality is that whatever happens in the fiat world greatly influences what happens in the crypto world.

If monetary policy tightens, which is essentially what all central banks have been suggesting, it will work against risk-taking, and therefore work against the value of Bitcoin. After all, Bitcoin needs to see a lot of risk appetite to go higher. The massive selloff from 4 days ago suggests that we are going to see further downside momentum. If we break down below the $20,000 level, it’s likely that we would continue to go much lower. If we were to break down below that level, could open up a move all the way down to the $12,000 level, which has been a longer-term target for quite a few traders.

Market Struggles to Go Higher

• The 50-Day EMA sits just above, and it should offer quite a bit of resistance as well. The Bitcoin market is one that I would look to fade rallies at the first signs of exhaustion because the $25,000 level has offered quite a bit of resistance.
• After that, the market could go to the $28,000 level, which extends to the $32,000 level. It’s not until we break through all of that that I would consider the overall trend of the market changed.
• Because of this, it’s very likely that we will continue to see a lot of hesitation to go higher, so fading rallies probably work.

If and when we finally get down to the $12,000 level, at that point I would start to build a longer-term position as we could enter an accumulation phase. Bitcoin has done this before, fallen quite drastically and then did nothing for a couple of years before taking off. I don’t know that we are done selling off, because I don’t think that the risk appetite has returned strongly enough to send the market much higher.

Ready to trade Bitcoin in USD? We’ve shortlisted the best crypto brokers in the industry for you.

This continues to be a market that I want to take advantage of every time it tries to recover and shows a long wick to the upside.

The German DAX Index went back and forth on Monday as traders still have no real clue as to what they want to do. The €12,775 level has seemingly held for the session, but we are drifting lower overall. Remember, as Germany goes, so goes the rest of the European Union. In other words, this is a chart you should be paying close attention to, because it will have an effect on other indices such as Paris, Amsterdam, and Milan. Furthermore, it can also have an effect on the euro and vice versa.

The fact that we are continuing to slide lower tells me that we have further to go, and rallies at this point in time should be looked at with the utmost suspicion. In fact, I think of them as “gifts” for those who jumped in and tried to front run any type of bounce. Furthermore, if you have the ability to short this market, may very well find this a tempting set up on any signs of exhaustion after a bounce.

Take a look at the €13,600 level, it looks as if it is a ceiling in the market, and that’s only assuming that the market can break above the €13,200 level, which I’m not entirely convinced that it can. Ultimately, it’s more likely that we continue to break down and reach toward the €12,600 level, followed by the €12,500 level. Anything under there would have me looking for €12,000 rather quickly.

Keep in mind that DAX is highly levered to global trade, as most of the major players on this index are massive exporters of industrial goods. Because of this, the DAX will continue to suffer due to the fact that it looks like we are heading into a global slowdown. In that scenario, there’s no real reason to think that stocks go well, be it in Germany or anywhere else. The market has been very noisy to say the least, but the one thing that has been clear at this point is that sellers certainly have the advantage. Ultimately, this continues to be a market that I want to take advantage of every time it tries to recover and shows a long wick to the upside. We would need to break above €13,600 to even begin the conversation of this market looking bullish.

One thing that could help is if the Federal Reserve decides to loosen monetary policy again, which they almost certainly will do sometime late next year.

Ethereum did very little on Monday as it looks like the $1250 level is going to continue to offer a little bit of the barrier. At this point, the market looks as if it is ready to roll over again, perhaps challenging the $1000 level. While the recent price action has been somewhat encouraging, the reality is that Ethereum has a long way to go before turning the attitude of the entire market around.

Quite frankly, if Bitcoin cannot pick itself off the floor, there’s no reason to think that Ethereum will. This is a “fade the rally” type of market until something drastically changes, not the least of which would be a final completion of the rollout of upgrades for the network. Beyond that, there have been a lot of security breaches on Ethereum-based ecosystems, although not necessarily Ethereum itself.

While I do think that Ethereum has some type of future, we are still trying to figure out what that future is. Yes, I am fully aware of the fact that we are heading into “crypto winter”, a time when you can accumulate vast amounts of crypto in an attempt to benefit quite nicely once things start to take off. This is my plan, but I’m only going to do it with coins that I believe are going to have a future. Luckily, Ethereum is most certainly one of those.

That being said, I do think that we have further to go to the downside, and even if we do start to turn things around from this day forward, we have a long way to go before any significant recovery would have occurred to make me think that I had “missed the trade.” I will think of this more or less as a savings account, perhaps adding a bit here and there, accumulating over the next several months or years as we try to carve out some type of basing pattern.

One thing that could help is if the Federal Reserve decides to loosen monetary policy again, which they almost certainly will do sometime late next year. This is because the economy is almost positively going into a recession, so eventually they will have to let go of the inflation argument, if for no other reason than to save their own portfolios.

Gold should have a good future because there are a lot of financial concerns out there, and a lot of people will take advantage of gold for safety.

Gold markets went back and forth during the trading session on Monday, as the Americans were away celebrating Juneteenth. This pulled a lot of the volume out of the market, so therefore it looks as if it’s a day you can essentially write off. Nonetheless, the 200 Day EMA sits just above, and now it looks as if it’s going to offer a little bit of resistance. Furthermore, the 50 Day EMA is dropping down to perhaps cross underneath the 200 Day EMA, which is essentially the “death cross” that a lot of longer-term traders pay close attention to.

However, it’s very likely that we are going to be more range bound than anything else, because quite frankly the bond market is oversold, so if we see rates drop in that market, it’s likely that we will see gold take off. Furthermore, we formed a little bit of a “double bottom” down at the $1800 region, so as long as we can say above that can make an argument for support. If we were to break down below the $1800 level, then it’s likely that the $1750 level would be targeted. After that, then you are looking at a move to the $1700 level.

On the other hand, if we were to turn around and take out the $1850 level, it would wipe through a lot of resistance and therefore it opens up the possibility of reaching the $1900 level, and then possibly even the $2000 level. All things being equal, I think this market remains a bit of a “buy on the dip” type of situation, but if we do break down below that $1800 level, that would be a huge red flag. I think this continues to be a situation where the market is trying to build a bit of a base, perhaps to recover.

Gold should have a good future because there are a lot of financial concerns out there, and a lot of people will take advantage of gold for safety. That being said, we also have the US dollar strengthening overall, so that does work against the value of gold, but do not think that we can have both gold in the US dollar rights at the same time, because it has happened in the past. However, it does cause a lot of crosswinds and therefore you should be cautious with your position size.

 

I feel that there’s no compelling reason to be a buyer at this point.

Litecoin pulled back ever so slightly on Tuesday as we try to figure out whether or not there is any real hope for the crypto markets turning around. We did have a decent Monday, but it should be noticed that it was Memorial Day in the United States, so a lot of the American institutional traders were not trading.

It’s also worth noting that there is a lot of noise just above as we had been going sideways for a couple of weeks, broke down below that level, and now are retesting that same area. In other words, we may see more sellers jump back into the market. It looks to me as if the 50-day EMA above will continue to cause downward pressure as well, which currently sits near the $83 level.

If we do break down, it’s very likely that Litecoin will go looking to reach the $50 level, and then maybe even the $40 level after that. This is a market that has been in a downtrend for quite some time, and it’s worth noting that the spread between the 50-day EMA and the 200-day EMA is almost perfect as far as a picture of a sustainable downtrend is concerned.

It’s very likely the crypto is about to see a lot of coins disappear because most of them have no real use case scenario. I personally have used Litecoin, and I like it a lot. However, adoption is a major problem and I think we are getting close to a situation where we will probably see half of these coins disappear, if not more than that. This is the natural cycle of things when it comes to technology, as we had seen in 1999 when so many of the hot tech stocks disappeared.

In an environment where risk appetite is scarce, it’s difficult to imagine that a lot of major institutional players are going to throw a ton of money at Litecoin. However, it’s very likely that it will survive, but I think that we have a rough couple of months at the very least ahead of us, so I feel that there’s no compelling reason to be a buyer at this point. In fact, what I would like to see is a lot of sideways and quiet action where people get used to whatever price we are trading at.

Make sure that you build up your position slowly.

Gold markets were quiet on Monday, which should not be a huge surprise considering that it was Memorial Day in the United States, and futures trading was somewhat limited. Because of this, I would not read too much into the candlestick other than that the market is hanging around the 200-day EMA yet again. We are in an area where the market will have to decide its next move rather quickly.

The 50-day EMA is above the $1875 level and dropping. Because of this, I think there is still a significant amount of technical pressure on this market, but ultimately, we have to determine where we are going next. Alternatively, this is a market that I think will have a lot of noise attached to it as the interest rates in America have been all over the place. Recently, they have been falling, but I think that traders are starting to jump into the bond market for safety, so I would not read too much into it. Because of this, a pullback is very possible, and if we were to break down below the $1850 level, I suspect that we may have to reset. The $1800 level underneath should be an area where a lot of support could be found, so as long as we stay above there, we have the possible making of a longer-term uptrend. However, if we give up that area, it could get ugly rather quickly.

If it moves like that, it would almost certainly have to do with the US dollar spiking and value. I do think that both gold and the dollar can rally, but it’s going to depend on global macro conditions. At this point, things look rather tenuous at best. If we can break above the 50-day EMA, that could kick off a huge move higher, perhaps sending gold to the $1925 level, maybe even the $2000 level over the longer term.

When I look at this chart, at the very least I would anticipate a bit of a pullback so that we can build up momentum and continue to rally. If we break down below the hammer that pierced the $1800 level, gold will fall apart and go much lower. In these types of environments, it’s very difficult to get overly bullish or bearish on anything with size. Make sure that you build up your position slowly.

The German DAX Index rallied a bit on Monday, reaching the €14,600 level in the cash market. However, you can see that we have pulled back a bit to form a shooting star. At this point, the market looks as if it is testing a significant amount of resistance, but at this point, I think we need to find an opportunity to short this market based on recent action. That is not a mean that the DAX is going to fall apart, just that it’s likely that we need to pull back.

On the other hand, if we were to break above the 200-day EMA, then it’s possible that we could go looking to the €15,000 level. The market will more than likely look at that as a major barrier. Whether we can break above the €15,000 levels is a completely different question, and I think it would be difficult for that to happen right away. At this juncture, I think that a pullback probably will find a little bit of a support level near the 50-day EMA, so don’t be surprised at all to see that we are supported in that area.

If we were to break down below the €14,000 level, then it’s likely that we will go looking to reach down to the €13,500 level underneath, and breaking down below there it’s likely that we would go looking to the €12,600 level. Looking at the chart, it’s obvious that we are trying to break out to the upside, but I think we are going to have a very noisy market going forward, as the European Union has to deal with a lot of noisy behavior, as there are major concerns when it comes to energy supply. Given enough time, we will have more clarity, but it looks as if we are at least trying to turn things around. At this point, I do think that you are more likely going to have a short-term pullback. If we break through the €14,000 level, things get ugly. As we are between the 50- and the 200-day EMAs, it’s likely that things will remain volatile as per usual. I believe that if the European Union is going to recover, then it’s likely that it will show up in the DAX before others. However, if we go the other way, the same can be said.

The macro situation is not good, but no market moves in one direction forever.

Monday was Memorial Day in the United States, so any S&P 500 Index trading will have been done after hours in the futures markets. That being said, we did try to rally a bit but it is worth noting that we stalled right at the 50-day EMA. The 50-day EMA is a rather commonly followed technical indicator, so the fact that we stopped at that point it’s likely that we will have a certain amount of technical shorting at this point.

If we turn around and break down below the 4150 level, that will be the first barrier for the sellers to get through. After that, the 4100 level then could potentially be supported. If we were to break down below the 4100 level, then the market almost certainly breaks down rather drastically at that point. Given enough time, the market would then go looking towards the 3900 level.

This has been a very bullish run over the last several days, but keep in mind that we are in a very bearish market, so occasionally you will get these massive moves higher. Bear market rallies are some of the most vicious ones, but they are particularly tricky due to the fact that they also tend to sell off just as rapidly. Even if we do try to go higher at this point, it’s really not until we break above the 4300 level that you have the “all clear” for a trend change. What’s also interesting about that area is that the 200-day EMA sits just above it as well, so I anticipate a huge battle in that area. Yes, the S&P 500 was oversold, but all of the fundamental reasons for this market to fall remain intact, and is difficult to imagine that things have suddenly changed. Yes, interest rates have dropped a bit in America, but that is simply because people are starting to buy bonds. Eventually, the market will figure that out, and start to drop again. However, if we break above the 4300 level, we have to follow the price and stop arguing. The macro situation is not good, but no market moves in one direction forever, so I think what we have seen here has been a little bit of a relief rally more than anything else.

The market needs to see signs of strength rather soon, or we could see a major turn in the overall attitude. 

Bitcoin fell a bit on Friday to show signs of weakness but also turned around as the US dollar calmed down quite a bit. Nonetheless, Bitcoin still looks rather negative in general, especially as the US dollar has been so strong. Keep in mind that Bitcoin is a risk appetite-influenced asset, and as long as the risk appetite is all over the place, Bitcoin will continue to be very noisy.

The $40,000 level above will continue to be an area that we need to pay close attention to, as it has offered such a significant resistance barrier. Any rally from the top of this hammer will more than likely go looking to that area, which will be like a magnet for price. Furthermore, the 50-day EMA is reaching the $40,000 level, so I think that adds even more credence to that idea as resistance is being found there.

If we were to break above the $40,000 level, then it is likely that we could go looking to the 200-day EMA, perhaps even the $45,000 level. The market is very close to the bottom of the overall consolidation that we have been in for a while, so it does make sense that we may attempt to rally. However, if we were to break down below the $35,000 level, it is likely that we could break down rather significantly. Because of this, the market would almost certainly go looking to reach the $30,000 level, which is the next large, round, psychologically significant figure.

If we were to break down below there, then we will almost certainly see Bitcoin end up in freefall. The market needs to see signs of strength rather soon, or we could see a major turn in the overall attitude. Keep in mind that Bitcoin needs to be paid close attention to, as the entirety of the crypto world is influenced by what happens here. As there is a severe lack of risk appetite, I fully suspect that Bitcoin could break down and enter the markets into what is known as a “crypto winter.” The size of the candlestick from Thursday certainly suggests that we are going to continue going lower. However, a bounce might simply be necessary just to build up more downward pressure.

Until Bitcoin does something, Solana is probably going to sit still. 

Solana did very little on Friday as we continue to see the $101 level as an area that continues to offer support. The $100 level just below there also offers a significant amount of support, so I think this is more or less going to be a “support zone.” If you look at this chart, you can see that the market has gone sideways for a little over a week, and now it looks as if we are going to continue to see this market try to figure out what is going to happen next.

Just above, we have the 50-day EMA near the $108 level and going sideways. At this point, the market looks as if it is simply trying to figure out what to do next, as it has been sideways for a while. If we break down below the $100 level, that would be a negative turn of events, and more likely than not would send the Solana market down to the $80 level. The $80 level has been important multiple times in the past, so I think it would make a nice target, as well as a major support level. If we break that level to the downside, that would be the worst-case scenario for Solana, and would almost certainly send this market to reach the $50 level.

On the upside, if we were to break above the $120 level, then it opens up the possibility that the market could recover. If we can break above the $120 level, then Solana could go looking to the $140 level as a target. Breaking above that market could then send the Solana market to the $160 level.

In general, I think the one thing that you are probably going to see is a lot of volatility and a way of mimicking Bitcoin and Ethereum more than anything else. It is worth noting that we are going to continue to see a lot of chop here, just as we have seen in various crypto markets. Until Bitcoin does something, Solana is probably going to sit still. Even more of a correlation would be Ethereum to this market.