Let’s start with the USD as it is the most important piece of the puzzle we are trying to solve. Against many currencies the USD has been weak, and especially weak against commodities. Gold breaking ATHs, Silver reclaiming its 2011-2013 base, Copper breaking its 2019 high, all that while most developed market currencies like GBP & AUD have been consistently breaking their highs, consolidating above resistance and pushing higher. With a few exceptions, even EM currencies have been getting stronger and look like they could actually keep getting stronger. However the USD has gotten really oversold, is at a key support level that has repeatedly failed to close below it and the sentiment against the USD is overly bearish. So in my opinion the USD is due for a bounce before it continues lower. As you can see on my DXY and EURUSD charts, I think it could get to 96-97 & 1.14-1.15. If it gives, those are levels where it will be time to re-evaluate the situation.
So now let’s get into US indices, Gold and Oil which are the things most people are looking at. The SPX dipped below its ATH and is now sitting above it, while NDX retested its trendline and bounced hard. In my previous analysis I did expect such a correction and on twitter I called for 3.3k SPX & 10.9-11.1k NDX. Both bottomed 50 points higher, yet I believe they could still hit those targets and probably go even lower short term. This aligns well with the potential bounce on the USD. However, this isn’t me calling for a crash as the trend is still up, a correction is needed and it is still early to tell whether the bull run is over. It is a tricky situation as I am still bullish long term, but this correction could be quite strong and shake-out most people. Even though indices and the USD are giving signs of a reversal, I don’t want to short support after a strong correction. Gold is also tricky as it is consolidating nicely above ATHs. This could lead to a big move up once 2000 break, but like SPX I do believe a dip below is healthy to shake-out the breakout longs. That would also coincide nicely with the DXY testing 96-97 which would most likely cause Gold to drop to the 1740-1810 area where I’d like to go long. To close things up with the traditional part of the analysis it’s time for Oil… which looks really, REALLY bad! Its retest of the 41-44$ area and the drop from there after consolidating for so long, tells me that Oil is going to 25-26$ before it goes higher. If it goes above 44$ I’ll definitely change my mind and go long, but for now it really looks awful.
As you have probably all noticed crypto markets have been in a really bad shape recently. Things got extremely hot with many coins running fast and hard, probably too fast and too hard. This alt season lasted for over three months, and alts in general where already trending higher against BTC since early September 2019. In my previous analysis I mentioned that I expected a correction, but that I am still bullish. So what do I mean by that? How can I expect a correction and still be bullish? Well, because we ARE still in a bull market and it was just time for a really strong correction that would take the market down 30/40%, after the market had gone up so much since the March bottom. Many alts look like they’ve had their bubbles popped and are going down hard, with yesterday’s bounce being just a dead cat bounce. Most of their structures against USD or BTC seem to have broken and there is more pain ahead.
For Bitcoin my targets were 9.5-10k for longs, which has held pretty well so far, but the bounces haven’t been good at all. Not only that, but 10.5-10. 6k turned into resistance, while the chart looks like a massive round top which occurred at the worst place possible (R1 Yearly + Horizontal) with a massive SFP. 12k got hit and there simply was no more juice left As for the downside, 9.5k still hasn’t been hit and the CME gap still hasn’t been filled… while there are even more important untested areas even lower at 7.1-7.8k which also have confluence with high volume nodes, along with the Yearly Pivot that gave the 8-12k move which I think is going to temporarily break and the low will be swept.
Finally, I won’t go into detail for any alts other than Ethereum. In a few days, in my “Market Snapshot” segment on Cryptocube I will give some setups and do some more specific analysis for other alts, but for now I will focus on ETH only. ETHBTC completely broke its bullish structure, as did ETHUSD. These charts look pretty bad as yesterday they probably finished retesting the 360-370 area… I say probably as there still is a chance they go up to test 370+ before going down, as BTC has a CME gap and ETH didn’t really go high enough. Yesterday I thought the bounce could get even up to 383, so I waited to short 368 and missed a good opportunity.
Just by using simple TA you can see how bad things are for ETH. Below are all major pivots, retested key resistance areas, flipped support into resistance and all that after getting extremely overbought, hitting R3 yearly and so on. So where would I be wrong and change my mid? If ETHUSD closes above 375 and BTC above 10.6k. If BTC closes above 10.6k I’d target 11.2k and then re-evaluate. Otherwise for ETHBTC I am aiming for and 0.0265, while for ETHUSD 285 & 250. That would be enough to make me think that either the correction is over or expect a strong bounce.
I hope you enjoyed my analysis, and stay safe out there as things could get wild!