At this point, we have not broken out of the triangle, so I believe all traits have to be thought of as more or less a potential range-bound type of situation.

The West Texas Intermediate Crude Oil market initially tried to rally on Tuesday but gave back gains as we started to see more negativity around the world. The oil market has been bouncing around in a triangle for a while, so it does make a certain amount of sense that we continue to test both sides of it. That being said, we are racing toward the uptrend line, which could bring a lot of noise into the picture.

If we break down below the uptrend line, then it is likely that oil will continue to dive, reaching towards the $95 level, and then eventually the $90 level. I do not have much interest in trying to guess when or if we break down below this uptrend line. I will simply wait for some type of a daily close outside of this triangle to place my next longer-term trade.

It is worth noting that we broke below the 50-day EMA, but it is not the first time that we have since we have formed the triangle. In other words, although it is a negative turn of events, it is not necessarily one that I am overly concerned with. The market will continue to be one that is very noisy, due to the fact that there are so many confusing and conflicting inputs. The overall global economic picture is one of inflation, and perhaps a slowdown, both of which could cause problems for the oil market. If demand drops due to the economy slowing, then obviously there is a problem here. On the other hand, there are concerns about a lack of supply due to the Russian oil that is not hitting the markets. Adding more angst to the market is the fact that so much time had been spent not drilling during the pandemic.

The market breaking above the highs of the trading session on Tuesday would be a very bullish sign, perhaps opening up the possibility of a move back to the $110 level, which coincides with the downtrend line above. At this point, we have not broken out of the triangle, so I believe all traits have to be thought of as more or less a potential range-bound type of situation.

This pullback has been rather deep, and one would have to think that the market is going to continue to struggle.

The Bitcoin market broke down significantly on Monday as we kicked off the week on the wrong foot. That being said, the market looks as if it is going to test this $40,000 level, and I think there is a significant amount of support that extends from there to the $38,000 level. Because of this, I think it is probably only a matter of time before the buyers get involved, but we need to see some type of bounce or supportive candlestick before putting money to work.

Bitcoin has had a nice run as of late, but this pullback is rather deep, and it does make you wonder whether or not we can continue to go higher at the moment. Ultimately, the market continues to see a lot of concern out there when it comes to global risk appetite, which is a major influence on what happens in Bitcoin. The Bitcoin market is pretty far out on the risk spectrum, so you need to see some type of “risk-on” type of situation to get people to buy Bitcoin again.

The US dollar continues to be like a wrecking ball for a lot of other assets, so one would have to think that that could continue to be the case here. If we break down below the $37,500 level, then we could more than likely go looking to the $35,000 level for support again. A breakdown below that level would be catastrophic. I think that the $30,000 level would be targeted almost immediately, and things will continue to get nasty again.

On the upside, if we can take out the 50-day EMA to the upside, is very likely that we could continue to go higher, maybe even threaten the $50,000 level given enough time. That being said, this pullback has been rather deep, and one would have to think that the market is going to continue to struggle. Ultimately, this is a market that looks just as confused as many other markets, so I would not expect any type of stability or sanity coming out of Bitcoin until you see it coming out of some of the more traditional markets. If we can get things together in a market like the NASDAQ 100, Bitcoin is going to be even worse.