Bitcoin Bullish Swing Failure?

Levels to Eye

Preface

Stocks posted a narrow trading range in a week which saw CPI inflation fall to 4.9% and Consumer Sentiment drop to 6-month lows. PPI also continued its precipitous fall as it went from 2.7% in March to 2.3% in April.

Aside from Consumer Sentiment, investors were given some cause for celebration. Yet while stocks traded sideways, crypto fell to multi-week lows near 26k. This was partly due to speculation that the US government is trying to sell off its Bitcoin assets. Centralized exchanges are also cracking down on users with KYC and geo-restrictions ramping up. Meanwhile the looming US debt ceiling adds another risk.

Money has been leaving the space since Bitcoin eclipsed $30k, and it feels like that was the relief bounce needed by many. While this urges some caution, we’re now looking at a very interesting technical setup. Stay tuned as we’ll cover it shortly!

Now let’s take a look at what’s on the docket for the upcoming week.

Economic Calendar

Highlights

  • Retail Sales – Tuesday
  • Building Permits – Wednesday
  • Powell Speech – Friday

Breakdown

Retail Sales – Tuesday

Retail has been under pressure since February, as cost pressures and higher interest rates have weighed on consumers’ willingness to spend. April is expected to show a rebound as the economy continues to normalize following the Covid-19 pandemic.

Building Permits – Wednesday

2023 has been a year of subdued housing demand amid higher interest rates and rising consumer prices. February and March came with a rebound, and preliminary numbers for April are forecast to fall in line with the March figures.

Housing has begun to stabilize, but still faces tremendous pressure from higher borrowing rates. It should be monitored for a reversal back to the downside in coming months.

Powell Speech – Friday

Fed Chair Jerome Powell is always a wildcard, and I can’t remember a time when he delivered a speech where the markets didn’t experience considerable volatility. Buckle up, it should be entertaining! If you look at volatility as a potential opportunity to long dips or take profits, this should excite you.

Airdrops

As you know, I’ve recently become a fan of airdrop hunting. Since then, it’s become a full-time hobby for me. One good airdrop can be life-changing.

I remain focused on some of the top-billed protocols of 2023, such as zkSync, Linea, Starknet, and Zetachain, while also participating in others.

Faycy has been doing some great work, and here’s a recent alpha-packed thread of theirs:

Technical Analysis

Bitcoin Daily Chart

A close above Friday’s open would give us a nice reversal and a swing failure on the bottom. No reason why we can’t run it back to 28k in that case and 30k if that cluster breaks.

Bitcoin vs Nasdaq100 Weekly Chart

This is an important relationship as we’re comparing Bitcoin to the tech sector. Bulls are currently trying to save the weekly candle after a breach of support. This kind of setup can be quite bullish if we get follow-through to the upside.

Nasdaq 100 Index Daily Chart

The tech index continues its epic run and is up nearly 15% since we identified the trendline breakout earlier this year. We’ve got support at 13000 and near-term upside targets of 13700 and 14300.

Don’t bet against stocks in a pre-election year…

S&P500 Index Weekly Chart

Bulls saved the prior weekly candle and this is now an interesting setup with the weekly inside bar. We’re range-bound until either 418.31 or 403.74 breaks.      

Earnings season has been positive overall and guidance hasn’t been bad. The market is having to contrast a Fed that’s talking about higher interest rates for longer with a street expectation that inflation will continue to decline steadily and a recession will begin before the end of the year. That’s why we’re seeing so much indecision in this area.

Jay Charles

Editor in Chief, The Trading Tank.

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