The Crypto Comms #15

4 min readJul 25, 2022

Bitcoin is at an inflection point as all eyes turn towards the FOMC meeting on Wednesday. The question on everyone’s mind is: will risk assets shoot for another leg up, or is the relief rally over? Here’s the context for the week.

In this issue:

Bitcoin analysis
Macro update
Latest happenings
Listening material

Technically speaking

Bitcoin analysis

Bitcoin/Dollar is down -2.5% week-on-week as prices consolidate above the 2017 all time highs. The crypto reached $24,277 before sellers stepped in, pushing it as low as $21,740 on Monday.

The market now has to decide whether it will go for a second leg up, or fall back into the range and potentially print new lows below $17,600.

Currently, BTC/USD is above the 20-Daily ema, and has printed a ‘bull flag’ visible on H4. But attempts higher have resulted in swift and impulsive bearish engulfing candles, setting lower lows and lower highs on the H4 time-frame.

This is pitted against the daily situation, which is technically within ‘bullish retest’ territory, per the tweet below.

https://twitter.com/ChrisOnCrypto1/status/1551427508758781952

Locally, an H4 close above $22,260 is enough confirmation for another leg higher towards $30,000 in my view. On the other hand, a daily close below the 20-daily EMA, or an intra-day sell off below $21,200 means the relief rally is over and ranging is back in play.

In all time-frames, prices tend to reach extreme points where the majority capitulates, only to reverse course and mark up later. Market makers using order-flow data sets tend to perpetuate such price moves. So there is a scenario where BTC/USD wicks to $21,200 and swiftly reverses.

All in all, until the 20-daily EMA is officially lost, the working logic is that of a trending market; whereby moving averages are more consequential than range-levels.

If lost, it’s worth noting that bitcoin is within macro-bottoming levels regardless. This favours low-time preference plays, and somewhat limits downside risk/reward in both the short and long term.

Macro update

July 27th is on the horizon, with many analysts viewing the FOMC meeting as ‘the big event’ for the week. The market is positioned for a 0.75% rate hike on Wednesday, with speculation of a 1% hike falling since last week.

Target rate probabilities for July 27th 2022 FOMC meeting.

If a surprise 1% hike comes about, new lows for risk assets may be in play. If the hike is within expectations (0.75%), risk assets won’t have an unexpected headwind. A Fed pivot (i.e. lower or unchanged hike) would be a tailwind for risk.

As usual, one should expect volatility around the meeting, so allowing the dust to settle may be the prudent option.

The Dollar index (DXY) is still cooling off, trading below 106.3 at the time of writing. As noted last week, acceleration towards 103 is a tailwind for risk-assets, while an intra-week reversal and reclaim of 107 would be accompanied by capital flowing out of risk.

Meanwhile, the SPX trades above the pivot point at 3,961 points. Consolidation around the area is fine, provided daily closes remain above 3,860. All in all, macro is in a ‘not great, not terrible’ posture, with the FOMC meeting on Wednesday carrying substantial weight as to whether this relief rally has legs.

The pieces are set, and the game continues.

Latest happenings

Listening material

Episodju 058 ma’ Joe Anthony Debono | Jon Mallia Podcast

Dear readers,

The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Monday and Wednesday. I am not perfect and this is not a science — nor is this newsletter a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.

Thank you for reading.

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