ETH/USD has done very little during the trading session on Monday, as we continue to see the market look as if it is threatened. Recently, we had seen a lot of upward momentum due to the network merge and the upgrade coming, as it has had a lot of enthusiasm enter the Ethereum market. At this point, the market is sitting just below the 50 Day EMA, which is a technical indicator that a lot of people pay attention to. If we break above the 50 Day EMA, we still have a lot of selling pressure above there to keep in mind.

Keep in mind that the US dollar has been strengthening for a while, and that does open up the possibility of a bigger move. The US dollar strengthening also works against the value of Ethereum and other risk assets, so it all ties in together quite nicely. Because of this, I think it is probably only a matter of time before this market breaks down. It’s also worth noting that the 200 Day EMA’s is just above the $2000 level, which is where we had pulled back from previously.

Market can unwind

On the downside, the market could very well drop to the $1200 level, which is the recent resistance barrier that we just broke above. A bit of “market memory” could come into play, and therefore you need to be cautious about that region. If we do slash through that level, then it’s likely that the market could unwind quite drastically.

On the upside, we need to see a daily close above the $2000 level in order to think that we can break out for a bigger move. This is not to say that we necessarily need to melt down, just that the market is obviously finding the area around $2000 very difficult to overcome.

• With the strengthening US dollar and a severe lack of risk appetite, it does make a lot of sense that Ethereum has taken a bit of a beating.
• I suspect that we have further to go to the downside given enough time.
• Be advised that we need to be very cautious and could be looking at an opportunity to buy Ethereum at much lower levels.
• If you believe in it longer-term, think of this as value that’s about the show itself.

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This is a very noisy market like many others, but it does most certainly favor the US dollar.

The British pound broke down Monday to slice through the 1.19 level. However, we have also seen quite a bit of noisy behavior in this market, so I do think that the market might be a bit noisy and difficult at times. Keep in mind that the currency markets are all over the place due to the Federal Reserve and its tightening policy, so it does make sense that we would see the difficulty in grabbing a hold of the market.

At this point, I still believe it is a “fade the rallies” type of situation, so we need to pay close attention to the rallies on short-term charts, because as soon as we show signs of weakness, I am more than willing to start selling again. After all, it gives you the ability to pick up “cheap dollars”, which is like getting something on sale. After all, the US dollar is by far the strongest currency in the world for a reason. The Federal Reserve is much more aggressive than other central banks around the world, so it does make sense that we will continue to see the US dollar pick up momentum.

If we rally from here, the market is likely to see the 1.22 level as a major barrier to getting above, and until we do, it’s difficult to imagine a situation where you would be a “buy-and-hold” type of investor. That being said, the Federal Reserve does change its monetary policy, or if it looks like inflation is abating in the United States, then it’s possible that we could see an attempt to turn things around. However, it looks like we are getting much worse as far as the global economy is concerned, so I think that will continue to drive the value of the greenback higher.

The size of the candlestick is relatively long, and it is worth pointing out that we had made a “lower low” during the day but are seeing a bit of a pushback. Nonetheless, it’s likely that we will continue to drop to the 1.18 level, possibly even the 1.15 level after that. Ultimately, this is a very noisy market like many others, but it does most certainly favor the US dollar.

Ultimately, it does bottom given enough time, and then it becomes a great investment.

Bitcoin initially tried to rally during the trading session on Thursday but gave back gains yet again. The Bitcoin market looks miserable at the moment, and I don’t really see an argument for buying at this point. Yes, the $20,000 level is a large, round, psychologically important figure to pay attention to, but at this point, it looks as if we are grinding away and trying to break through.

If we break down below the $18,000 level, it should open up an even deeper correction down to the $15,000 level. After that, I anticipate that the $12,000 level will be the target. In fact, my longer-term target for Bitcoin is my target. In that area, I will be paying close attention to the market to see whether or not we can stabilize enough to start buying again. I do believe that eventually, Bitcoin will find a reason to turn around, but right now we still have plenty of monetary tightening that is coming down the road, and that will continue to be a major influence on risk appetite. As long as risk appetite is miserable, Bitcoin is going nowhere.

The market has been selling off every time it has tried to rally and at this point, the US dollar will continue to strengthen against most things, especially an asset that is still trying to define what it is. That being said, the market could take off to the upside, but if we do I think the absolute “ceiling in the market” right now is the 50 Day EMA. Granted, we could get a bit of a relief rally, which makes quite a bit of sense. At that point, I will more likely than not try to find a crypto exchange to start shorting Bitcoin again. Ultimately, it does bottom given enough time, and then it becomes a great investment. That being said, it’s more likely than not that we are going to see some type of longer-term base-building project in order to turn things around. Quite frankly, if you are bullish on Bitcoin, then you’re going to have plenty of time to build up a position. In fact, the market is likely to see a “crypto winter” in order to change things around. Crypto does tend to move in cycles, and I think we are in that downward cycle yet again.

It looks as if we are going to be held hostage to headlines around the world, none of which look that good at the moment. 

The Australian dollar fell during thin trading on Friday as we continue to see a lot of negative pressure in this market. That being said, the Australian dollar has broken below the 0.74 level, and it looks like it is ready to go lower. The Australian dollar is highly correlated to the commodities markets, so you need to pay close attention to it as global demand is going to be a major issue.

Inflation is an issue as well, and the Federal Reserve is so hawkish does drive up the value of the US dollar. That being said, the market is trying to break down a bit from here and favor the greenback, and now it looks like we are ready to reach towards the 50-day EMA. The 50-day EMA is rapidly approaching, so that will be the next major barrier. That being said, a lot of things have changed in this pair as of late, not the least of which is that the Reserve Bank of Australia has dropped the word “patience” from its statement, suggesting that it was going to be a bit more hawkish than originally thought. However, since then, we have seen the FOMC Meeting Minutes come out much more hawkish than anticipated, so that reverses any type of bullish pressure for the Aussie. The fact that we are closing at the bottom of the candlestick suggests that there could be a bit of follow-through as well.

If we can break down below the 200-day EMA, then the Aussie is likely to go much lower, perhaps falling all the way back down to the 0.70 level. Speaking of which, when you look at the chart, you can see that this 500-point range has been important more than once, so if we fall from here, it would just be a simple continuation of that larger consolidation area.

Keep in mind that the market faces quite a few risks at the moment, and it does make sense that the Aussie struggles overall. After all, it is very sensitive to risk appetite in global growth. It looks as if we are going to be held hostage to headlines around the world, none of which look that good at the moment. Ultimately, the market is more likely to fall than to rise. The 0.75 level should continue to be a bit of a “ceiling.”

My signal to start getting bearish again is that if we break down below the inverted hammer from the Tuesday session.

The S&P 500 initially tried to rally during the trading session on Thursday but gave back the gains as we tested the 50 Day EMA. The market squeezing between the 50 Day EMA and the 200 Day EMA indicators suggests that we are going to squeeze and perhaps have to make a bigger move. Because of this, it is possible that we are going to see inertia build-up, and then either break out or break the whole thing down.

My signal to start getting bearish again is that if we break down below the inverted hammer from the Tuesday session. At that point, I would anticipate that the market could go looking towards the 4300 level, possibly even the 4200 level. That is where we had bounced from, and quite frankly the nice rally that we have had is under threat due to the fact that there is a huge argument between Wall Street and the bond market as to what is going to happen with the Federal Reserve.

The question comes down to whether or not the Federal Reserve is going to fight inflation, or if they are going to support Wall Street. For the last 14 years, traders have learned that the Federal Reserve will come to the rescue, but now we have over 8% inflation in the United States, and that does change things. Not to sound too cynical, but the real tell was when Federal Reserve members had to stop day trading!

If we do rally, the 4500 level is going to be resistance, possibly after that the 4585 level. If we were to break above there, then you have to take a serious look at the possibility of “forming an inverted head and shoulders”, which is obviously a very bullish setup. In general, I do not like that idea, but there is no point in arguing with the market.

Pay close attention to the bond market, because if they continue to price in massive interest-rate hikes, it is only a matter of time before Wall Street capitulates. The coming recession is obviously going to have a major influence on the market as well, so you need to pay close attention to what is going on. For what it is worth, you need to pay close attention to the fact that the underlying fundamentals do not support a lot of bullish behavior.