Introduction
Hi everyone, welcome back to a new newsletter, thanks for all the recent signups, in this newsletter we usually cover more macro focused updates on the crypto markets, the wider macro and my take on crypto assets. The macro outlook is usually one of the most important pictures to paint for investing and always will be a key factor on the crypto markets as a whole, let us take a look at price action and some of the things that have been on my mind over the last week or two.
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Price Action Overview
After a while of sideways price, low volatility and boring markets for the past 60/70 days, finally we got some volatility and reactive price action in accordance to some news about Binance and Coinbase with the SEC and also the FOMC rate hike news.
So yeah, rough start so far this June as this current PA now ends our up only narrative that has been playing out since the start of the year. The BTC pairing with USD has dropped around 10/12% since the start of June and half of that coming just over the past week. Price is currently $25.5k which is level we have had marked out since the start of the year, and has been a key level we have been waiting to see retested over the past few newsletter’s. The question is now to buy the rest?
This 25k level for BTC is very important, I think adding some spot exposure here makes sense, and especially if we see this level remain strong going into this weekly close, a weekly close above 25.5/26k would be the signal to add to longterm spot positions, this is something I will execute on the coming Monday morning.
What we do NOT want to see is 25.5k and then 25k turned back into resistance, this would really be a nasty scenario for likely the remainder of the year, would really put a hole in any bullish cases and likely mean we will be revisiting low 20’s, which key levels i have already marked out are around 21.8k region. This would be another fill.
ETH is also in a very similar position but falling 22% since the start of the year and around 12% over the past week, which is obviously on the more aggressive side compared to BTC but alts across the board have been getting hammered. The good news is that since posting the chart above, the first signs of this trendline holding is looking good and even if we fail at this level, at least we have 1.6k range EQ which has been marked out for a longtime in these newsletters, and historically I would consider it one of the most important levels ETH has in terms of price action.
I said many times over the past few newsletters that if ETH does get a retest of 1.6k then this would be the first place I would be adding to my long exposure, and honestly I have began that process, but just taking it slowly going into this weekly close to make sure we are confident about the week ahead. I think for bears to push price down passed 1.6k and maintain price action below is a pretty heavy task, would take a considerable about of bearish news or shorts to make this happen, and still seems highly unlikely, think any dip below would be taking the risk of adding further.
Update while writing:
Marketing seems to be bouncing nicely, and considering in every newsletter over the past weeks there has been bids set at that 1.6k and 26k level for both ETH and BTC, this is exactly what we want to be seeing with buyers stepping back in.
Also as I wrote above, this is exactly the type of price action we want to be seeing going and holding across this weekend, for the weekly close, if we close at these current levels then I think adding more exposure heavily seems the most logical action to take for me personally. So far, so good and all the current support level’s that we have in place and holding up extremely nicely, especially this trendline on ETH.
Scary news shake the US markets?
The most important news so far that has broken in the month of June is that the SEC is now going after Binance, Binance of course being the largest exchange in the crypto ecosystem and this pretty much being a system wide attack from the US government.
This has set the standard and bar for how the SEC wants to handle their involvement with crypto adoption and digital assets within the US moving forward, this is a pretty aggressive approach considering Binance has previously been working and cooperating with the SEC, and shows just how unfriendly the US towards crypto.
This news was the first to put a dent in the positive price action since the past few months, obviously the SEC going after binance is a scary thought, and traders agreed, more than $450mn turned into stablecoins after US regulator sues world’s largest crypto exchange. Also traders moved more than $800mn out of Binance in the 24 hours after the crypto exchange was sued by the US securities regulator.
“SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency”
Only a few days after the SEC published documents about their intent to sue Binance, they also issued a case against Coinbase, a US exchange that is actually publicly traded and has been cooperating and even approach by the SEC to go public. This was a wild card announcement and nobody could have seen this coming, the stock got hit pretty hard and crypto investors are now very concerned about the space in the US, and how hard is the crypto landscape going to be hit for US users moving forward.
So we saw two of the largest exchanges in the world get sued by the SEC over the past 10 days, this is obviously some pretty hard hitting news, and actually BTC was not THAT badly affected considering the price action at the moment. This is the type of news that you would expect to have a devastating impact on price, and while it may have been feeling that like over the past 2 weeks, actually BTC has held up pretty well.
Obviously altcoins are a different story and the problem their is that certain altcoins are getting named and targeted as securities from the SEC, leaving a lot of room for speculation and fear for majority of holders. I think just adding to the major pairs BTC and ETH right now is the only reasonable move, I would maintain any altcoins position that you might have already been holding, but I am personally not adding more exposure to my altcoin positions, outside of BTC, ETH and RON.
Also just a few days ago, we also had key information from the FOMC meeting
The latest FOMC meeting has concluded just a few days ago, the FED have now decided to “skip” this meeting and put a pause on rising interest rates, this affectedly is pretty big news as this is the first time we have had this type of result since the hikes began. Maybe the FED are already seeing positive signs ahead, or maybe are not tackling inflation as heavily as some would like. The meeting was neither bullish or bearish in its meeting, but post event as expected volatility did increase and we saw price tank a few % before rebounding today.
“Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy,” the post-meeting statement said. The Fed next meets July 25-26
Looking forward, while it seems we will still have 1 or 2 interest rate hikes to swallow during the rest of 2023, the future-year readings, though, do imply the Fed will start cutting rates – by a full percentage point in 2024, if this year’s outlook holds. The long-run expectation for the fed funds rate held at 2.5%. So we really are very close to the highest point of rates, and during the last few months of this year is where we will likely peak, moving into 2024 and 2025 rates should start dropping substantially which is positive news for global and macro markets. The FED also spoke on how a soft landing is still very much possible and a recession somehow could be avoided if all runs smoothly but to me personally that seems overly confident and I personally believe that once we look back in a few years, currently we are in a recession.
Position Changes
Bids filled for 1.6k on ETH, and 26k on BTC
Starting to buy $ETH on a weekly basis
Still a large position in $RON (Yielding 20%)
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