Is Bitcoin in a Holding Pattern Ahead of the Fed Decision?
Updated
Another week passes and watching the chart has to be more boring then Mr. Rogers re-runs. The market is simply consolidating and there is nothing to do but wait. No hype no drama, just a long drawn out consolidation but this may change.
Bitcoin has correlated with Gold since the first of the year. Both are now entering their 35th day of consolidation. That is right 35 days. Back in late June when the correction started we mentioned this was likely a broader wave 2 and it may take several weeks or a month or so before the consolidation completed. Well its been one month.
The past week has even been less eventful, like watching paint dry. There is simply nothing to do but let the market play out. The key is having a plan vs listening to the hype on social media. Trying to daytrade these types of consolidations are generally met with failure. There is simply tooooo much noise and over the last month we have gone nowhere!!!
However this may change tomorrow!
FOMC Rate Decision:
Tomorrow the much anticipated July Fed rate decisions comes out. Most markets have been simply in a tight consolidation as we await the not so much the 25bp cut, but the tone of Powell's speech after. You heard me right, we are looking to see if Bitcoin moves with the markets after the decision.
Gold Consolidation:
Gold has been consolidating since June 26th, Bitcoin since the 27th. The pattern may be different but the fact is both are simply consolidating looking to break out one way or the other. Gold does have a better structure and if it can take out 1450, we are likely in the next bull market for Gold.
Bitcoin does not have the longevity of Gold, but it has matured quickly over the past couple years. Was interesting to hear Ron Paul in an interview mention that Bitcoin was good, and provided competition to Central Banks.
In short Bitcoin is starting to become more a SOV, as is evident on even Kitco and Silver Doctors where old school Goldbug analysts compare Bitcoin to Gold. Ok with the exception of Peter Schiff who thinks Bitcoin is going to take out the low this year. What a bunch of Schiff.
Regardless of the naysayers, both Gold and Bitcoin are likely in the midst of a broader bullish move, however, nothing is a straight line. We can still pullback to 8500 which is the next support level. The 9100 level is the key level to hold, and 10,320 is a key level to take out. No different than Gold where 1365 is the key level to hold and 1450 the one to take out.
There is nothing on a 2 hour chart, or even the daily that is going to predict the next swing. I do not care about your 50/150 EMA, divergence on the RSI, or triangles that form randomly in the market. We just do not know, but this does not mean we can not be prepared. If we swing to 13k or 8500 do you have a plan?
Planning for multiple scenarios is one way to take the anxiety out of trading and investing. Ohhh if it goes here, I'll add some more, if it goes there I'll trim some out. Goes back to not being right or wrong, but being prepared.
In my opinion the market is still setting up to move higher from here. Yet I do not discount a swing lower in the short term. Either way we will take advantage of the next swing but this requires a lot of patience.
We are waiting for the market to reveal itself, not guess the direction in the next 24 hours. However if Bitcoin moves the same direction as Gold after the Fed rate decision and Powell's speech it will provide additional evidence that the market is maturing and larger players are investing and trading Bitcoin as they would Gold.
As much hoopla and Blah blah blah going on all around us, there is simply nothing happening here. The market is ranging in a tighter consolidation and until something breaks we wait!!
Will be interesting to see what happens to Bitcoin after the rate cut and Powell's speech and see if the correlation with Gold continues. IF it does this would be more evidence that Bitcoin is becoming more adapted by larger investors.
Hey I know this was a boring post other than the Fed parallel, but there really has been nothing going on over the past week more exciting than watching Mr. Rogers reruns as the paint dries!
I do have an idea though!! We can use this time to grade art projects errrrrr chart analysis. Three prizes, Most colorful, Most abstract, Most indicators fit onto one chart. I'll have to dig up a prize package for each one so I can hardly wait to judge!!! So in about say 6-12 hours after the comment section is more crowded then Interstate 5 through LA at 8am, we will start a judging!
Bitcoin has correlated with Gold since the first of the year. Both are now entering their 35th day of consolidation. That is right 35 days. Back in late June when the correction started we mentioned this was likely a broader wave 2 and it may take several weeks or a month or so before the consolidation completed. Well its been one month.
The past week has even been less eventful, like watching paint dry. There is simply nothing to do but let the market play out. The key is having a plan vs listening to the hype on social media. Trying to daytrade these types of consolidations are generally met with failure. There is simply tooooo much noise and over the last month we have gone nowhere!!!
However this may change tomorrow!
FOMC Rate Decision:
Tomorrow the much anticipated July Fed rate decisions comes out. Most markets have been simply in a tight consolidation as we await the not so much the 25bp cut, but the tone of Powell's speech after. You heard me right, we are looking to see if Bitcoin moves with the markets after the decision.
Gold Consolidation:
Gold has been consolidating since June 26th, Bitcoin since the 27th. The pattern may be different but the fact is both are simply consolidating looking to break out one way or the other. Gold does have a better structure and if it can take out 1450, we are likely in the next bull market for Gold.
Bitcoin does not have the longevity of Gold, but it has matured quickly over the past couple years. Was interesting to hear Ron Paul in an interview mention that Bitcoin was good, and provided competition to Central Banks.
In short Bitcoin is starting to become more a SOV, as is evident on even Kitco and Silver Doctors where old school Goldbug analysts compare Bitcoin to Gold. Ok with the exception of Peter Schiff who thinks Bitcoin is going to take out the low this year. What a bunch of Schiff.
Regardless of the naysayers, both Gold and Bitcoin are likely in the midst of a broader bullish move, however, nothing is a straight line. We can still pullback to 8500 which is the next support level. The 9100 level is the key level to hold, and 10,320 is a key level to take out. No different than Gold where 1365 is the key level to hold and 1450 the one to take out.
There is nothing on a 2 hour chart, or even the daily that is going to predict the next swing. I do not care about your 50/150 EMA, divergence on the RSI, or triangles that form randomly in the market. We just do not know, but this does not mean we can not be prepared. If we swing to 13k or 8500 do you have a plan?
Planning for multiple scenarios is one way to take the anxiety out of trading and investing. Ohhh if it goes here, I'll add some more, if it goes there I'll trim some out. Goes back to not being right or wrong, but being prepared.
In my opinion the market is still setting up to move higher from here. Yet I do not discount a swing lower in the short term. Either way we will take advantage of the next swing but this requires a lot of patience.
We are waiting for the market to reveal itself, not guess the direction in the next 24 hours. However if Bitcoin moves the same direction as Gold after the Fed rate decision and Powell's speech it will provide additional evidence that the market is maturing and larger players are investing and trading Bitcoin as they would Gold.
As much hoopla and Blah blah blah going on all around us, there is simply nothing happening here. The market is ranging in a tighter consolidation and until something breaks we wait!!
Will be interesting to see what happens to Bitcoin after the rate cut and Powell's speech and see if the correlation with Gold continues. IF it does this would be more evidence that Bitcoin is becoming more adapted by larger investors.
Hey I know this was a boring post other than the Fed parallel, but there really has been nothing going on over the past week more exciting than watching Mr. Rogers reruns as the paint dries!
I do have an idea though!! We can use this time to grade art projects errrrrr chart analysis. Three prizes, Most colorful, Most abstract, Most indicators fit onto one chart. I'll have to dig up a prize package for each one so I can hardly wait to judge!!! So in about say 6-12 hours after the comment section is more crowded then Interstate 5 through LA at 8am, we will start a judging!
Note
Small spike lower initially after the Fed announcement but this was likely a dollar move. Not much of a correlation so that throws this theory out.
Regardless Bitcoin is holding up here and this is a sign of strength. Want to see a close and the next candle move higher. This is increasing the probability of a push higher towards 12k.
Note
More evidence of a potential rally is Litecoin printing a defined higher low which is also a sign of strength. Litecoin has been a leader, and it may lead the market out of the correction by taking out the 115.00 level.
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