9/10. Crypto Recovery or Short Squeeze? Key Data as CPI Looms.
Overview:
Over the last two trading days, the
SP500 and 
QQQ posted green candles, pulling us back from the bearish abyss we ended up in last week. However, neither has yet surpassed Friday’s opening price.
Many speculate that the U.S. election outcomes could positively affect crypto prices, though we believe that any correlation is weak beyond short-term timeframes. Regardless, today, Harris did a decent job debating Trump. About 15 minutes into the debate, the market reacted by dropping 1.72%.
Monday and Tuesday were relatively uneventful in terms of Fed reports, but tomorrow, we’ll get the CPI and core CPI data. Last month’s inflation rate was 2.9%, and estimates are at 2.6%. If it comes in higher than 2.6%, the market could react negatively. If it meets or falls below expectations, we could see range trading for the next four months until liquidity flows back into the asset markets.
ETF buying has also picked up, breaking a streak of selling.
W: So far, we’re painting a green candle, hovering around the 55.9k weekly level. Tomorrow’s Fed report will likely determine whether we close the week above or below this critical level.
D: In our last report, we noticed a bullish MACD divergence that has now played out. Weekend to Tuesday price action has pushed BTC back into the previous trading range of 55.9k to 58.4k. The lower bound is about to be tested as support. On Monday and Tuesday, the price nearly reached the BB MA and the upper bound of 58.4k. Monday’s green candle resembles a short squeeze, although it’s debatable how many participants are borrowing crypto from brokerages versus shorting regular or perpetual futures, the latter of which doesn’t result in a price spike if the trade goes against the shorts. Bearish to neutral if the weekly level holds.
4h: Currently trading above the BB MA, with the weekly level perfectly aligning with it.
1h: At the lower bound of the BB, Monday’s high and Tuesday’s high are drawing a MACD bearish divergence. Let’s see if this divergence played out during the presidential debate’s red candle or if more is to come tomorrow.
Alts relative to BTC: No significant divergences noted besides 1 project. Read below in opportunities.
Bull Case: Once again, BTC has pushed up, potentially driven by awakened bulls or a short squeeze, returning to its old trading range. September 6th marked the cycle bottom without breaking below the previous August 5th low of 49k. Global liquidity has been climbing for 72 consecutive days. With this and some positive macroeconomic news, BTC could hold between the 52.2k and 55.9k levels, possibly sparking a rally to 80k.
Bear Case: Monday’s spike may not reflect genuine interest in crypto but rather a short squeeze, soon to be crushed by a contracting economy due to high interest rates.
Fear and Greed Index: 45.01, back to neutral.
Prediction: Range trading unless tomorrow’s Fed report throws a wrench into the works.
Opportunities (W, 4h divergences of major alts): One coin that showed weaker price action during the last 4 bullish days is
ARUSDT . While the market rallied, AR continued to sell off, signaling that insiders and whales may be keeping selling pressure high. AR still faces a potential 53% decline before it reaches the BTC ETF price level recorded on January 11th.
Over the last two trading days, the
SP500 and QQQ posted green candles, pulling us back from the bearish abyss we ended up in last week. However, neither has yet surpassed Friday’s opening price.Many speculate that the U.S. election outcomes could positively affect crypto prices, though we believe that any correlation is weak beyond short-term timeframes. Regardless, today, Harris did a decent job debating Trump. About 15 minutes into the debate, the market reacted by dropping 1.72%.
Monday and Tuesday were relatively uneventful in terms of Fed reports, but tomorrow, we’ll get the CPI and core CPI data. Last month’s inflation rate was 2.9%, and estimates are at 2.6%. If it comes in higher than 2.6%, the market could react negatively. If it meets or falls below expectations, we could see range trading for the next four months until liquidity flows back into the asset markets.
ETF buying has also picked up, breaking a streak of selling.
W: So far, we’re painting a green candle, hovering around the 55.9k weekly level. Tomorrow’s Fed report will likely determine whether we close the week above or below this critical level.
D: In our last report, we noticed a bullish MACD divergence that has now played out. Weekend to Tuesday price action has pushed BTC back into the previous trading range of 55.9k to 58.4k. The lower bound is about to be tested as support. On Monday and Tuesday, the price nearly reached the BB MA and the upper bound of 58.4k. Monday’s green candle resembles a short squeeze, although it’s debatable how many participants are borrowing crypto from brokerages versus shorting regular or perpetual futures, the latter of which doesn’t result in a price spike if the trade goes against the shorts. Bearish to neutral if the weekly level holds.
4h: Currently trading above the BB MA, with the weekly level perfectly aligning with it.
1h: At the lower bound of the BB, Monday’s high and Tuesday’s high are drawing a MACD bearish divergence. Let’s see if this divergence played out during the presidential debate’s red candle or if more is to come tomorrow.
Alts relative to BTC: No significant divergences noted besides 1 project. Read below in opportunities.
Bull Case: Once again, BTC has pushed up, potentially driven by awakened bulls or a short squeeze, returning to its old trading range. September 6th marked the cycle bottom without breaking below the previous August 5th low of 49k. Global liquidity has been climbing for 72 consecutive days. With this and some positive macroeconomic news, BTC could hold between the 52.2k and 55.9k levels, possibly sparking a rally to 80k.
Bear Case: Monday’s spike may not reflect genuine interest in crypto but rather a short squeeze, soon to be crushed by a contracting economy due to high interest rates.
Fear and Greed Index: 45.01, back to neutral.
Prediction: Range trading unless tomorrow’s Fed report throws a wrench into the works.
Opportunities (W, 4h divergences of major alts): One coin that showed weaker price action during the last 4 bullish days is
ARUSDT . While the market rallied, AR continued to sell off, signaling that insiders and whales may be keeping selling pressure high. AR still faces a potential 53% decline before it reaches the BTC ETF price level recorded on January 11th.
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