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ladies and gentlemen, it’s time for a comprehensive and fresh market update covering both the crypto and equity markets. lets delve into the short-term, mid-term, and long-term perspectives, considering the dynamics of both cryptocurrency and equity markets. Stay tuned for insights that aim to provide a well-rounded understanding of the current market conditions.
In recent months, #BTC has experienced an insane run, breaking through nearly every significant macro resistance level and currently hovering just below 44k. What lies ahead? As long as Bitcoin holds above 42800, there’s potential for the formation of new local highs, possibly establishing a new range akin to the one observed between 36k and 38k. The presence of a daily bearish divergence, in the context of a short-term parabolic move, might not be immediately relevant unless proven otherwise. Drawing parallels to the Jan-Feb run, such short-term upward momentum can persist despite bearish signals. Looking forward, potential targets include 45k and 48k, around the 0.618 Fibonacci level. Surpassing 48k could trigger a new move towards 52k (refer to the image below). While pullbacks are a possibility, predefined invalidation levels are in place to monitor and navigate market fluctuations.
Nevertheless, a breach below 42800 initiates a more deeper correction, targeting 40k and potentially 38k. For short-term traders, 42800 serves as a crucial level to maintain in order to preserve your position. In the mid-term, the focus shifts to the significance of 38k as the next potential reversal zone, extending towards the 30k-34k range. For long-term holders, the critical trend remains intact unless #BTC dips below the WEMA200, approximately around 25k. It’s essential to identify your investor type and act accordingly!
Now, when it come to alts it looks even a bit more interesting. It looks like that alts have finally broke the downtrend against BTC pair which is really significant. Why? because since 2021 NOV alts basically kept on making new lows, it looks like a turning point is happening which is a start of a whole new cycle on alts, see total2 ( see image below).
Hence, the perspective on alts has shifted for long-term holders. There’s a significant possibility that the bottom has been established, and each substantial pullback is now viewed as a bullish macro higher low. hence, any significant downturns, if they occur, are perceived as opportunities to buy the dip on strategic support levels.
From a trader perspective, many alts hit macro resistance zones, such as AVAX SOL NEAR. Therefore, it becomes trickier to open new bigger positions from current market price, especially given that many alts went up at least 200% from the bottom. And again, small dips towards EMA50 on the 4H timeframe remains valid until proven otherwise.
What about equities?
looking at the chart below this segment, you’ll see SPX hovering around 4600 points. The last instance of such a level was during the start of the market’s downtrend around April 2022. SPX is now only 5% below its all-time high (ATH), a noteworthy development. If SPX manages to surpass its ATH, it might signify a potential blow-off top phase, leading to upward movements toward the 1.618 Fibonacci level. On the contrary, a failure to achieve this could result in testing lower levels, with 4300 and 4160 points being potential scenarios.
Last time the markets made a similar move around the same market conditions was during the sub-mortages crash in 2008. After the final run, the FED started to cut interest rates.
The markets are currently experiencing a significant euphoric phase, where everyone screams for crazy targets. While this excitement is typical during market upswings, it also poses substantial risks. Equity markets have surged dramatically, approaching a critical area. Hence, it’s crucial to emphasize that effective risk management is more vital than ever. The first quarter is anticipated to be interesting, marked by both macroeconomic and cryptocurrency developments. Key events include the earnings reports of major tech companies, the potential approval of ETFs, and the prospect of a rate cut. As markets teeter on the possibility of a blow-off top phase, the timing of ETF developments becomes particularly intriguing. Investors might leverage an approved ETF not just for potential long positions but also as a means to short BTC — a perspective that is currently receiving minimal attention.
Overall very interesting market situation, Q1 one is going to be one of the most interesting time period in both stock and crypto markets and I am certain that investors are looking forward towards this period.
Amado Carrillo Fuentez
MZ
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