Fake-out confirmed? š„¶ - Feb. Market Update
Hey team. Wanted to get this quick market breakdown out before the week started.
Weāll go over a few KEY factors that might just dictate the direction of markets moving forward in 2023, 2024.
Letās dive right inā¦
As we pointed out in our previous post on Gold, the Dollar, and Bitcoin here, we were keeping an eye the important $100 support level on the $DXY (US dollar) chart.
Turns out our previous analysis appears to be playing out as we predicted, with the $DXY slingshotting off that $100 support level last week.
Combine that with a MONSTROUS jobs report coming in MUCH higher than expectations, markets will now be asking whether the FED is truly doing enough to control inflation.
āBut inflation is coming down?ā Yes. But the FEDās job right now is to basically ābreakā something and engineer some sort of recession to ensure inflation doesnāt persist or come back up.
In other words; good news from the economy) = bad news for the FED/markets, and bad news from the economy = good news for the FED/markets (means theyāre doing their job).
āOK OKā¦but what does this mean for equities & my precious Bitcoin?ā
Short term answer; nothing good.
Looking at the Daily Bitcoin chart, we can see a hard smackdown from the $24K resistance level.
Weāve marked the $25K level because everyone and their mother are calling for a smooth reclaim and test of $25K.
This is a psychological & key resistance level that plenty of people would LOVE to short a potential pullback on. Unfortunately, thatās not how markets work.
Not to mention the Momentum 2.0 indicator is showing signs of Bitcoin being overbought.
Combine that with the bounce in the $DXY, and we might have some pullback pain ahead for those ābuying this dipā and those waiting to short at $25K.
Eyes peeled out there across all markets this week.
Just our thoughtsā¦maybe weāre being too bearish. Either way, figured the community might find this valuable!
Hope you all have a fantastic week out on the charts.
Cheers!
-The AlgoBuddy Team