Just a short-term bounce or a new bull market?

TL;DR:

  • Our market view (mid-September):
    • Short-term: Neutral
    • Long-term: Negative
  • Fed statements and macroeconomic data (mainly inflation) drive the markets.
  • Crypto Total Market Cap (TOTAL) lost another 10% in August, while the year-to-date return is even more negative at about -56%.
  • Many fundamental data show there is a value in crypto assets.

Market overview

After the positive monthly performance in June, the crypto market again turned bearish and ended August in the red. Investors were maily focused od macroeconomic data and Fed statements in the previous month.

General macroeconomic data show that the coming winter will be challenging. Although the US job market and retail spending are still stable, other data suggests that the global economic conditions are slowly cooling down, especially the US real estate market.

All mentioned above is important to understand how the data will impact monetary policy. In August, the Fed communicated that cycle of raising rates is far from over. This was the news that moved the markets the most. After the speech, the markets turned around and experienced negative performance in the following days. Similar actions were communicated by other largest central banks as well. In early September, the European Central Bank followed with a 0.75bps rate hike, announcing that more rate hikes will follow.

All things considered, the markets are in a difficult period, but investors can be optimistic because in the following weeks/months, markets will eventually find a bottom. Then a new cycle full of new opportunities will take place.

TOTAL_2022-09-15_13-30-43_c9cac

Long term view is still negative until Bitcoin’s price stays below crucial (weekly) trendlines. Our Market Stages Model is still in red, which tells us that investors’ positions are recommended to be defensive.

BTCUSDT_2022-09-15_13-30-31_2c656

The crypto market price trend is neutral in the short term, with sideways price action in August and early September. Our short-term market view is neutral.

As mentioned, the 100-day exponential moving average (white line – currently at $23.5k) is a crucial resistance at the moment. The $28-30k represents the next significant resistance.

Crypto market view (2022-07)

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DISCLAIMER: This article is for informational and discussion purposes only and does not constitute a marketing message, an investment survey, an investment recommendation, or investment advice. The article was prepared exclusively for a better understanding of market dynamics.