#WaveAnalysis #DJIA
• Dow Jones index broke key resistance level 36200.00
• Likely to rise to resistance level 36600
Dow Jones index recently broke above the key resistance level 36200.00 (which has been reversing the index form the middle of November).
The breakout of the resistance level 36200.00 accelerated both of the active impulse waves (iii) and 3.
Dow Jones index can be expected to rise further toward the next resistance level 36600 (top of wave (i) from November) – the breakout of which will lead to the test of the next resistance level 36800.00.
• Dow Jones index broke key resistance level 36200.00
• Likely to rise to resistance level 36600
Dow Jones index recently broke above the key resistance level 36200.00 (which has been reversing the index form the middle of November).
The breakout of the resistance level 36200.00 accelerated both of the active impulse waves (iii) and 3.
Dow Jones index can be expected to rise further toward the next resistance level 36600 (top of wave (i) from November) – the breakout of which will lead to the test of the next resistance level 36800.00.
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Will 2022 be the year of the Bitcoin bear market?
The cryptocurrency market received moderate support from retail buyers over the weekend. Over the past 24 hours, the capitalisation of all coins rose 0.22%, according to CoinMarketCap, approaching $1.97 trillion. The top altcoins lost 11-19% over 7 days but found buyers over the weekend.
The $2 trillion mark in total crypto valuation turned into local resistance last week, from where pressure has intensified. However, a strong buy-the-deep mood has kept the market from forming a downward spiral.
The cryptocurrency Fear & Greed Index was stuck at 23 over the weekend, indicating extreme fear.
The index has been hovering at the lower half of the scale since November 18th. Optimists, however, may note that the indicator has bounced back from the 10 level. The dip here in May and July coincided with the lows within the impulse, hinting at the potential for some technical rebound.
The cryptocurrency market received moderate support from retail buyers over the weekend. Over the past 24 hours, the capitalisation of all coins rose 0.22%, according to CoinMarketCap, approaching $1.97 trillion. The top altcoins lost 11-19% over 7 days but found buyers over the weekend.
The $2 trillion mark in total crypto valuation turned into local resistance last week, from where pressure has intensified. However, a strong buy-the-deep mood has kept the market from forming a downward spiral.
The cryptocurrency Fear & Greed Index was stuck at 23 over the weekend, indicating extreme fear.
The index has been hovering at the lower half of the scale since November 18th. Optimists, however, may note that the indicator has bounced back from the 10 level. The dip here in May and July coincided with the lows within the impulse, hinting at the potential for some technical rebound.
Friday's NFP should lower expectations for Fed policy tightening
The Fed continued to surprise markets at the start of the year with hawkish rhetoric by unexpectedly raising discussions on balance sheet shrinking. Investors are noticing that the issue has been on the table much earlier than it was before.
In the last episode of QE, it took almost two years from the start of tapering and allowing it to shrink. The pauses between regime switches gave time for the markets and the economy to adjust, and for the Central Bank to evaluate the results of the policy, because the lag between the change in policy and the peak of its impact on the economy often exceeds six months.
In our view, there is a real risk that the markets and the Fed are being too hawkish in their forecasts, moving abruptly from denial of inflation to a willingness to use their entire arsenal at once to beat it.
But such activity to rein in inflation could easily prove excessive. As Friday's labor market data showed, job growth in the U.S. continues to slow, at only 199K, an 11-month low and half of what was expected. The drop in the unemployment rate to 3.9%, the lowest since the pandemic began, reflects a decline in the number of people looking for work. But it hardly allows us to expect consumer spending to rise, depriving the economy of a crucial pro-inflationary factor.
In addition, fertilizer prices fell at a multi-year record pace last week, container prices have retreated from their peaks, and logistical problems are slowly fading from the agenda.
The Fed continued to surprise markets at the start of the year with hawkish rhetoric by unexpectedly raising discussions on balance sheet shrinking. Investors are noticing that the issue has been on the table much earlier than it was before.
In the last episode of QE, it took almost two years from the start of tapering and allowing it to shrink. The pauses between regime switches gave time for the markets and the economy to adjust, and for the Central Bank to evaluate the results of the policy, because the lag between the change in policy and the peak of its impact on the economy often exceeds six months.
In our view, there is a real risk that the markets and the Fed are being too hawkish in their forecasts, moving abruptly from denial of inflation to a willingness to use their entire arsenal at once to beat it.
But such activity to rein in inflation could easily prove excessive. As Friday's labor market data showed, job growth in the U.S. continues to slow, at only 199K, an 11-month low and half of what was expected. The drop in the unemployment rate to 3.9%, the lowest since the pandemic began, reflects a decline in the number of people looking for work. But it hardly allows us to expect consumer spending to rise, depriving the economy of a crucial pro-inflationary factor.
In addition, fertilizer prices fell at a multi-year record pace last week, container prices have retreated from their peaks, and logistical problems are slowly fading from the agenda.
Rate futures are laying down a 70% chance of a Fed rate hike as early as March. Several forecasters also suggest that the rate will rise at each subsequent meeting. But this could come as an excessive shock to the economy, risking causing a recession without putting it firmly on the growth track.
Interestingly, unlike the futures market, the currency market remains in a period of narrow sideways movement of just over 100 pips around 1.1300. It is unlikely that the ECB will act as quickly and decisively as the Fed. If projections for a rate hike by the latter as early as March and an accelerated move into a balance sheet reduction phase will form a strong upside potential for the dollar. However, after Friday's weak data we have a growing belief that the market has jumped ahead in expectations and a reversal of such will start soon, which will play against the dollar and relieve pressure on stocks.
Interestingly, unlike the futures market, the currency market remains in a period of narrow sideways movement of just over 100 pips around 1.1300. It is unlikely that the ECB will act as quickly and decisively as the Fed. If projections for a rate hike by the latter as early as March and an accelerated move into a balance sheet reduction phase will form a strong upside potential for the dollar. However, after Friday's weak data we have a growing belief that the market has jumped ahead in expectations and a reversal of such will start soon, which will play against the dollar and relieve pressure on stocks.
#WaveAnalysis
#USDCAD reversed from support level 1.2615
• Likely to rise to resistance level 1.2800
USDCAD currency pair recently reversed up from the key support level 1.2615 (which has been reversing the price from the start of December), intersecting with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse (1) from October.
The upward reversal from the support level 1.2615 stopped the earlier short-term impulse waves C.
Given the rising US dollar bullishness seen today – USDCAD currency pair can be expected to rise further toward the next resistance level 1.2800 (top of the previous wave B).
#USDCAD reversed from support level 1.2615
• Likely to rise to resistance level 1.2800
USDCAD currency pair recently reversed up from the key support level 1.2615 (which has been reversing the price from the start of December), intersecting with the lower daily Bollinger Band and the 50% Fibonacci correction of the upward impulse (1) from October.
The upward reversal from the support level 1.2615 stopped the earlier short-term impulse waves C.
Given the rising US dollar bullishness seen today – USDCAD currency pair can be expected to rise further toward the next resistance level 1.2800 (top of the previous wave B).
#WaveAnalysis #DJIA
Dow Jones reversed from resistance level 36800.00,
Likely to fall to support level 35000.00
Dow Jones index recently reversed down with the daily bearish Engulfing from the resistance level 36800.00, intersecting with the upper daily Bollinger Band and the weekly up channel from September.
The downward reversal from the resistance level 36800.00 started the active short-term corrective wave (ii).
Dow Jones index can be expected to fall further toward the next key support level 35000.00 (which reversed the price in December).
Dow Jones reversed from resistance level 36800.00,
Likely to fall to support level 35000.00
Dow Jones index recently reversed down with the daily bearish Engulfing from the resistance level 36800.00, intersecting with the upper daily Bollinger Band and the weekly up channel from September.
The downward reversal from the resistance level 36800.00 started the active short-term corrective wave (ii).
Dow Jones index can be expected to fall further toward the next key support level 35000.00 (which reversed the price in December).
The crypto market has been losing 0.6% over the past 24 hours, but since the beginning of the day, it has been adding 1.6% to $ 1.96 trillion against the dip to $ 1.86 trillion at the peak of the decline on Monday evening.
The Cryptocurrency Fear and Greed Index lost 2 points in a day, dropping to 21. This is still in extreme fear, just like yesterday and a week ago.
In our opinion, bitcoin and ether are bought locally by enthusiasts and a number of long-term strategic investors, while investment funds trade them based on bursts of demand or risk aversion.
By and large, this puts cryptocurrencies on a par with growth stocks, sensitive to the dynamics of interest rates: the rise in profitability causes a sell-off of risks. At the same time, we must not forget that cryptocurrencies are more mobile, that is, they sometimes lose twice or three times more than Nasdaq.
If so, then cryptocurrencies are far from the bottom since the process of normalizing interest rates in financial markets is far from complete.
The Cryptocurrency Fear and Greed Index lost 2 points in a day, dropping to 21. This is still in extreme fear, just like yesterday and a week ago.
In our opinion, bitcoin and ether are bought locally by enthusiasts and a number of long-term strategic investors, while investment funds trade them based on bursts of demand or risk aversion.
By and large, this puts cryptocurrencies on a par with growth stocks, sensitive to the dynamics of interest rates: the rise in profitability causes a sell-off of risks. At the same time, we must not forget that cryptocurrencies are more mobile, that is, they sometimes lose twice or three times more than Nasdaq.
If so, then cryptocurrencies are far from the bottom since the process of normalizing interest rates in financial markets is far from complete.
Rising rates do not threaten gold and could support a rise in price
An active reassessment of the outlook for monetary policy continues in the financial markets, but these changes have so far not moved gold from its position near $1800. The latest gold performance shows that it remains a portfolio diversification instrument, with little correlation to stock indices.
Gold has gained for the third consecutive day, almost hitting the $1810 level. Last week the price came under pressure along with stocks, as US government bond yields rose as investors preferred them over precious metals paying no dividends or coupons. Gold also decreased intraday on Monday on a sharp fall in equities.
However, buying on declines towards $1785 is well notable in gold. This is another jump around sustained buying. Previously, the areas of notable buying were $1760 in November and December and $1720 in August and September. Even earlier, in March 2021, gold got strong demand on dips to $1680.
It is important to note that the higher support levels in gold at the end of last year occurred at the same time as the bond yields were rising, so the correlation between these assets is not direct.
Historically, gold is vulnerable to rising long-term government bond yields only in case of a massive risk-off in the markets, which we witnessed in the epicentre of the last two global crises in 2008 right after the Lehman bankruptcy and in 2020 in the first weeks of the official pandemic.
An active reassessment of the outlook for monetary policy continues in the financial markets, but these changes have so far not moved gold from its position near $1800. The latest gold performance shows that it remains a portfolio diversification instrument, with little correlation to stock indices.
Gold has gained for the third consecutive day, almost hitting the $1810 level. Last week the price came under pressure along with stocks, as US government bond yields rose as investors preferred them over precious metals paying no dividends or coupons. Gold also decreased intraday on Monday on a sharp fall in equities.
However, buying on declines towards $1785 is well notable in gold. This is another jump around sustained buying. Previously, the areas of notable buying were $1760 in November and December and $1720 in August and September. Even earlier, in March 2021, gold got strong demand on dips to $1680.
It is important to note that the higher support levels in gold at the end of last year occurred at the same time as the bond yields were rising, so the correlation between these assets is not direct.
Historically, gold is vulnerable to rising long-term government bond yields only in case of a massive risk-off in the markets, which we witnessed in the epicentre of the last two global crises in 2008 right after the Lehman bankruptcy and in 2020 in the first weeks of the official pandemic.
If the Fed and other central bankers manage to rein in inflation without causing major market turbulence during the policy normalization period, it could be a good springboard for gold.
We have seen a similar example in the last tightening cycle. The first rate hike at the end of 2015 ended a corrective pullback in gold, becoming the starting point for a new six-month-long growth wave.
Now the approach of a rate hike could draw attention to gold as a hedge against declines in growth stocks, which have a high sensitivity to interest rate movements.
On the technical analysis side, if a new upside momentum in gold forms, it will lead the path to the $2500-2600 area after a 61.8% Fibonacci retracement from the August 2018 to August 2020 growth wave.
We have seen a similar example in the last tightening cycle. The first rate hike at the end of 2015 ended a corrective pullback in gold, becoming the starting point for a new six-month-long growth wave.
Now the approach of a rate hike could draw attention to gold as a hedge against declines in growth stocks, which have a high sensitivity to interest rate movements.
On the technical analysis side, if a new upside momentum in gold forms, it will lead the path to the $2500-2600 area after a 61.8% Fibonacci retracement from the August 2018 to August 2020 growth wave.
#WaveAnalysis
#Amazon reversed from support level 3132.30
• Likely to rise to resistance level 3330.00
Amazon recently reversed up from the key support level 3132.30 (previous monthly low from May), intersecting with the lower daily Bollinger Band and the support trendline of the daily down channel from the middle of November.
The upward reversal from the support level 3132.30 created the daily Hammer, which stopped the earlier medium-term ABC correction (2).
Given the strength of the support level 3132.30 – Amazon can be expected to rise further toward the next resistance level 3330.00 (former support from December).
#Amazon reversed from support level 3132.30
• Likely to rise to resistance level 3330.00
Amazon recently reversed up from the key support level 3132.30 (previous monthly low from May), intersecting with the lower daily Bollinger Band and the support trendline of the daily down channel from the middle of November.
The upward reversal from the support level 3132.30 created the daily Hammer, which stopped the earlier medium-term ABC correction (2).
Given the strength of the support level 3132.30 – Amazon can be expected to rise further toward the next resistance level 3330.00 (former support from December).
#WaveAnalysis
#NZDCHF reversed key resistance level 0.6275
• Likely to fall to support level 0.6177
NZDCHF recently reversed down from the powerful resistance level 0.6275 (which has been reversing the price from the start of December), intersecting with the upper daily Bollinger Band and the 38.2% Fibonacci correction of the downward impulse from November.
The downward reversal from the resistance level 0.6275 stopped the earlier short-term impulse waves (i).
Given the strength of the resistance level 0.6275 – NZDCHF currency pair can be expected to fall further toward the next support level 0.6177 (low of the previous waves (iii), 1 and (b)).
#NZDCHF reversed key resistance level 0.6275
• Likely to fall to support level 0.6177
NZDCHF recently reversed down from the powerful resistance level 0.6275 (which has been reversing the price from the start of December), intersecting with the upper daily Bollinger Band and the 38.2% Fibonacci correction of the downward impulse from November.
The downward reversal from the resistance level 0.6275 stopped the earlier short-term impulse waves (i).
Given the strength of the resistance level 0.6275 – NZDCHF currency pair can be expected to fall further toward the next support level 0.6177 (low of the previous waves (iii), 1 and (b)).
Altcoins have gone up, but BTC still has few bullish signals
The crypto market has again surpassed $2 trillion, adding almost 2.7% in the last 24 hours. Bitcoin, meanwhile, has not kept pace with the rise in altcoin prices: BTC strengthened by 1.45% against a 4% rise in ETH, while other leading coins added between 3% and 7%.
The purchase of altcoins has intensified after the first cryptocurrency defended the $40K mark. This was like a sign of faith in the sector's short-term prospects, which again allowed enthusiasts to invest in potentially more undervalued coins and projects.
The crypto Fear and Greed Index added 1 point to 22 overnight, but we can see that investors took the recent plunge as a buying opportunity.
On the chart, bitcoin rebounded from a psychologically important support level for the second time since September. In addition, the RSI indicator on the daily charts came out of the oversold area, signalling a pause in the bearish momentum.
The crypto market has again surpassed $2 trillion, adding almost 2.7% in the last 24 hours. Bitcoin, meanwhile, has not kept pace with the rise in altcoin prices: BTC strengthened by 1.45% against a 4% rise in ETH, while other leading coins added between 3% and 7%.
The purchase of altcoins has intensified after the first cryptocurrency defended the $40K mark. This was like a sign of faith in the sector's short-term prospects, which again allowed enthusiasts to invest in potentially more undervalued coins and projects.
The crypto Fear and Greed Index added 1 point to 22 overnight, but we can see that investors took the recent plunge as a buying opportunity.
On the chart, bitcoin rebounded from a psychologically important support level for the second time since September. In addition, the RSI indicator on the daily charts came out of the oversold area, signalling a pause in the bearish momentum.
However, it is too early to say that we are seeing the beginning of a new growth wave. There are several reasons for that.
In this wave of decline, the RSI indicator reached lower lows than earlier in December and markedly lower levels in September and July, marking more persistent and prolonged selling than in previous episodes.
Bitcoin's consolidation attempts this week is only a wobble near the bottom. A bullish reversal will be indicated by solid upward momentum in July or September. The mini rebound in December was quickly eaten away by the bears.
BTCUSD is consolidating near the lower boundary of the descending channel. To say that we see more than just a bounce within this trend is only possible if it grew above 45k - where the previous local lows and the downside resistance line are concentrated.
If bitcoin fails to develop an uptrend, it will seriously spoil sentiment for cryptocurrency traders, creating a toxic environment in the sector and putting selling back on the agenda, despite the prospects of individual projects.
In this wave of decline, the RSI indicator reached lower lows than earlier in December and markedly lower levels in September and July, marking more persistent and prolonged selling than in previous episodes.
Bitcoin's consolidation attempts this week is only a wobble near the bottom. A bullish reversal will be indicated by solid upward momentum in July or September. The mini rebound in December was quickly eaten away by the bears.
BTCUSD is consolidating near the lower boundary of the descending channel. To say that we see more than just a bounce within this trend is only possible if it grew above 45k - where the previous local lows and the downside resistance line are concentrated.
If bitcoin fails to develop an uptrend, it will seriously spoil sentiment for cryptocurrency traders, creating a toxic environment in the sector and putting selling back on the agenda, despite the prospects of individual projects.
Oil positive on Omicron and Powell's confidence in the economy
WTI crude oil surpassed the $80 mark in Tuesday's trading, near two-month highs and solidly above the 2018-2021 pivot levels near $75. Oil's fall in November-December by more than a quarter from a peak in late October probably served as a reset for oil.
Interestingly, oil rose yesterday against plainly bearish news. The WHO warned of a sharp rise in omicron cases in coming weeks, and Oman's oil minister said OPEC+ did not want to see oil at $100 and overheat the market.
However, traders were reading between the lines. The rapid spread of omicron is coming closer to the point of reaching collective immunity, raising the chances that summer travel and the holiday season will this time be much more pre-pandemic like.
While initially causing some pressure on quotations, Oman's comments on oil did not present anything new in substance. As before, the cartel intends to stick to its plan to raise production by 400K per day every month. This is more than enough to shift the balance in the market towards surplus at the start of the year, but not enough to avoid causing excessive overheating of oil and provoking a new shale boom in the US and elsewhere.
Producers in developed countries complain that banks are reluctant to finance new crude projects, requiring companies to become 'greener'. This raises the breakeven price of production projects, giving OPEC+ a head start.
In addition, oil was probably positively impacted by Powell's confidence in the economic recovery, which is not threatened by either omicron or several rate hikes this year. Locally, investors interpreted this as confidence in a surge in oil demand in the coming months, which boosted the price.
WTI crude oil surpassed the $80 mark in Tuesday's trading, near two-month highs and solidly above the 2018-2021 pivot levels near $75. Oil's fall in November-December by more than a quarter from a peak in late October probably served as a reset for oil.
Interestingly, oil rose yesterday against plainly bearish news. The WHO warned of a sharp rise in omicron cases in coming weeks, and Oman's oil minister said OPEC+ did not want to see oil at $100 and overheat the market.
However, traders were reading between the lines. The rapid spread of omicron is coming closer to the point of reaching collective immunity, raising the chances that summer travel and the holiday season will this time be much more pre-pandemic like.
While initially causing some pressure on quotations, Oman's comments on oil did not present anything new in substance. As before, the cartel intends to stick to its plan to raise production by 400K per day every month. This is more than enough to shift the balance in the market towards surplus at the start of the year, but not enough to avoid causing excessive overheating of oil and provoking a new shale boom in the US and elsewhere.
Producers in developed countries complain that banks are reluctant to finance new crude projects, requiring companies to become 'greener'. This raises the breakeven price of production projects, giving OPEC+ a head start.
In addition, oil was probably positively impacted by Powell's confidence in the economic recovery, which is not threatened by either omicron or several rate hikes this year. Locally, investors interpreted this as confidence in a surge in oil demand in the coming months, which boosted the price.
It will not be surprising if oil goes off to retest October highs near $85/bbl WTI and $87/bbl Brent in the next couple of weeks.
If the demand for risky assets remains in place by then, we would expect a start of a rally towards $100 and an entrenchment in the $80-100 range through 2022.
However, we cannot rule out that the speculative optimism in oil will fade as the Fed's tough stance on the economy is realised.
If the demand for risky assets remains in place by then, we would expect a start of a rally towards $100 and an entrenchment in the $80-100 range through 2022.
However, we cannot rule out that the speculative optimism in oil will fade as the Fed's tough stance on the economy is realised.
US dollar under pressure on inflation data
US consumer prices rose 0.5% in December, accelerating to 7.0% y/y. The core index added 0.6% on the month and 5.5% y/y. Prices excluding food and energy added more than 1.7% in the last three months, noting that inflation is creeping into the core of the economy.
However, fears of this trend may be exaggerated. Inflation data published earlier today in China showed a faster-than-expected slowdown. China could start exporting deflation again or at least stop pushing up prices around the world.
Noteworthy is the market reaction where the release put pressure on the dollar and spurred demand for risky assets: EURUSD is up 0.5% after the release, above 1.1400, Nasdaq100 is again testing the 16000 level (+0.9% so far today).
The dollar has been consolidating for a long time without much direction, so a breakout of the 1.1250-1.1350 range could start a strong momentum or even set a trend for a few months.
US consumer prices rose 0.5% in December, accelerating to 7.0% y/y. The core index added 0.6% on the month and 5.5% y/y. Prices excluding food and energy added more than 1.7% in the last three months, noting that inflation is creeping into the core of the economy.
However, fears of this trend may be exaggerated. Inflation data published earlier today in China showed a faster-than-expected slowdown. China could start exporting deflation again or at least stop pushing up prices around the world.
Noteworthy is the market reaction where the release put pressure on the dollar and spurred demand for risky assets: EURUSD is up 0.5% after the release, above 1.1400, Nasdaq100 is again testing the 16000 level (+0.9% so far today).
The dollar has been consolidating for a long time without much direction, so a breakout of the 1.1250-1.1350 range could start a strong momentum or even set a trend for a few months.
#WaveAnalysis
#AIG reversed from key resistance level 62.00
• Likely to fall to support level 59.00
AIG recently reversed down from the pivotal key resistance level 62.00 (former monthly high from November), strengthened with the upper daily Bollinger Band.
The downward reversal from the resistance level 62.00 stopped the previous intermediate impulse wave (3).
Given the strength of the resistance level 62.00 and the overbought daily Stochastic – AIG can be expected to fall further toward the next support level 59.00.
#AIG reversed from key resistance level 62.00
• Likely to fall to support level 59.00
AIG recently reversed down from the pivotal key resistance level 62.00 (former monthly high from November), strengthened with the upper daily Bollinger Band.
The downward reversal from the resistance level 62.00 stopped the previous intermediate impulse wave (3).
Given the strength of the resistance level 62.00 and the overbought daily Stochastic – AIG can be expected to fall further toward the next support level 59.00.
#WaveAnalysis
#USDCHF reversed resistance level 0.9250
• Likely to fall to support level 0.9110
USDCHF recently reversed down from the pivotal resistance level 0.9250 (which has been reversing the price from the end of November), intersecting with the upper daily Bollinger Band and the 61.8% Fibonacci correction of the downward wave (ii) from November.
The downward reversal from the resistance level 0.9250 created the daily reversal pattern Dark Cloud Cover.
Given the strength of the resistance level 0.9250 – USDCHF currency pair can be expected to fall further toward the next support level 0.9110 (which has been reversing the pair from August).
#USDCHF reversed resistance level 0.9250
• Likely to fall to support level 0.9110
USDCHF recently reversed down from the pivotal resistance level 0.9250 (which has been reversing the price from the end of November), intersecting with the upper daily Bollinger Band and the 61.8% Fibonacci correction of the downward wave (ii) from November.
The downward reversal from the resistance level 0.9250 created the daily reversal pattern Dark Cloud Cover.
Given the strength of the resistance level 0.9250 – USDCHF currency pair can be expected to fall further toward the next support level 0.9110 (which has been reversing the pair from August).
The value of the cryptocurrency market rose almost 3% over the past 24 hours to 2.07 trillion. Exceeding the psychologically important circular mark pulled demand for coins outside the top 10.
However, it is too early to say that a new rally in crypto has begun. The crypto market remains 30% below its peaks in early November, and capitalisation growth is uneven.
It is reasonable to talk about a rebound within the descending channel until that time.
If the dollar goes back to growth in the nearest future, it will pressure stock markets. The cryptocurrency market, in these circumstances, risks reversing back to the downside, stopping the rebound and remaining in a prolonged downtrend channel.
We should be wary of a smooth decline like this, as it drains optimists. We saw a similar descent in 2018 when the fall became uniformly smooth in the second half of the year, and a wide range of crypto-enthusiasts switched to standby mode until mid-2020.
However, it is too early to say that a new rally in crypto has begun. The crypto market remains 30% below its peaks in early November, and capitalisation growth is uneven.
It is reasonable to talk about a rebound within the descending channel until that time.
If the dollar goes back to growth in the nearest future, it will pressure stock markets. The cryptocurrency market, in these circumstances, risks reversing back to the downside, stopping the rebound and remaining in a prolonged downtrend channel.
We should be wary of a smooth decline like this, as it drains optimists. We saw a similar descent in 2018 when the fall became uniformly smooth in the second half of the year, and a wide range of crypto-enthusiasts switched to standby mode until mid-2020.