BTC Market Overview: 12th June 2023
CPI, interest rate decision, an overview of BTC and more.
This week it is important to keep an eye on the markets. On Tuesday we have the CPI print and on Wednesday Fed meeting regarding interest rate decision. Markets often react to the data and price action moves according to expectation. Therefore, this week we can expect volatility in the markets.
BITCOIN
BTC has been trading in the same range for a year now. The range highs are at 31.8k to 31k USD , while the range lows are at 16.4k-15.4k USD. This month BTC has been trading below April’s low at 26.9k. Therefore, it seems like BTC will be trading towards the mid range at 24.1k USD. Currently, price is at an important level of support and depending on whether it trades above or below 25k, we will have a better indication of the market trend.
As an investor I think there is still room for BTC to trade lower in the long run. Consequetly, I am waiting for the right opportunity to buy spot. As a trader I am just focusing on trading the market both ways. In regards to DCA (dollar cost averaging) into BTC, I do not think now is the right time, I would wait. I think there will be better opportunities to DCA when the market bottoms. Markets never recover right away, so even if you do not catch the absolute bottom, there will be a few months that price will be trading at the lower range. This will be the perfect time to DCA in and buy spot. Right now it is a good time to start managing your risk to the downside and trade the range if you can.
Here are some things to look at…
EMA 12 & EMA 21
Every time the EMA 12 & 21 cross on a weekly time frame, it gives us an indication of the overall market trend. For example, when the EMA 12 crosses to the downside, this indicates that the trend is bearish. When the EMA 12 crosses to the upside, this indicates that the trend is bullish. Right now, the EMA 12 has not crossed the EMA 21 but the bands are tightening. Depending on price action in the upcoming weeks, we will be able to confirm a bearish trend or a continuation of the current bullish trend.
25K USD as a critical point
The EMA 12 is at 26.6k USD and the EMA 21 is at 25.8k. In order fo the bullish trend to continue we need to see price hold at least 25k. If we see acceptance below 25k and the bands start to tighten or even cross, this would be the first indicator of a bearish environment. If the price goes below 25k, that increases the chance of the next few months of downside for BTC. Plus there is already a regulatory risk with the SEC going after big exchanges such as Binance and Coinbase.
In the case of a bearish scenario, 27–26K might be the local high and we can expect a continuation ot the downside to aorund 22–21k.
MADC & RSI
MACD (moving average convergence/divergence) is a trading indicator used in technical analysis of securities prices. It is designed to reveal changes in the strength, direction, momentum, and duration of a trend in a securities’s price. Currently, the weekly MACD is moving back down. Indicating that the momentum and strength of the bullish trend is weakening.
On the other hand, RSI (Relative Strength Index) is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30. At the moment, RSI crossed its weekly simple moving average and it is at 50, which can be considered as a neutral. However, if it goes below 50 it can be interpreted as a sign of weakness.
EQUITIES:
S&P 500
In the past months, the equities market has seen an agressive short squeeze, trading from 3,400 to 4,300. Heading into CPI print and FOMC meeting, there might be a pull back. The question remains when and if it will be correlated with BTC?
Equities might trade till the 0.786 Fib retracement level at 4,500 before coming back down. The first sign of weakness will be if the S&P 500 trades below 4,300 and then to the mid range below 4,200.
NASDAQ:
Nasdaq has a very similar set up as the S&P 500. It might trade to the 0.786 Fib retracement level at 15300 before a pull back to the mid range.
VIX:
Investors use the VIX to measure the level of risk, fear, or stress in the market. Hence it is widely known as the “Fear Index.” The higher the VIX, the greater the level of fear and uncertainty, with levels above 30 indicating tremendous uncertainty and being often associated with a bear market. On the contrary, the lower the VIX, the more confidence there is the market and it is associated with a bullish environment.
Currently the VIX is trading at 15. When the VIX trades in the weekly lower range — between 16 & 14 — it tends to indicate that it is bottoming and there could be a potential bounce back from this level. Therefore, it is a good indication for taking profits due to a potential trend reversal. After the VIX has bottom, the markets tend to enter a bearish environment.
I hope this information is useful!
Love and light,
Mariana
