The crypto market finds itself at a critical juncture as we wrap up a volatile week of trading. In today’s article, we’ll break down the key technical levels in Bitcoin and Ethereum to monitor, examine the macroeconomic forces driving price action, and highlight notable updates around stablecoins and Mt. Gox that could impact markets ahead.
Understanding the major factors in play allows us to make smarter trading decisions amidst the uncertainty. Let’s dive in.
Bitcoin Holds Key Support – For Now
Bitcoin saw a drop earlier this week to the $26,400 level before bouncing back up to around $27,700 at the time of writing. This $26,400 level represents a crucial support zone that could determine the next major move.
Looking at the hourly chart, we can see this level corresponds with horizontal support established multiple times in June and July. The daily chart confirms its significance as a key inflection point.
This $26,400 level must hold to avoid further downside. Below it, the next major support sits around $24,600 which would represent a much larger 7% drop. Holding $26,400 keeps Bitcoin’s bullish uptrend intact.
However, we’re not out of the woods yet. As long as global macro uncertainty persists, the risk remains of a harsh rejection at this support zone down to the $24,000s. That rejection would align with the volatile conditions we’ve seen throughout 2022.
For now, caution is advised while this level continues to hold. A clean break below it would open the doors for significantly more downside. Upside potential also appears limited given the macro backdrop.
Traditional Markets at a Pivotal Zone
Traditional markets are exerting tremendous influence over crypto prices now. Specifically, the S&P 500 is in a precarious spot after a substantial 20% bounce off its June lows.
It currently rests right at a critical horizontal support dating back 9 months. This level corresponds with the previous all-time highs from early 2022. Bulls want to see it decisively hold as support.
A rejection here risks invalidating the narrative of this merely being a bear market rally. In that scenario, a retest of the June lows becomes increasingly likely. For crypto, this would almost assuredly result in another capitulation event.
No one can predict the outcome, but the significance of this S&P 500 level can’t be overstated. It could determine the overall market trajectory in the second half of 2022.
Personally, I’m not convinced the bottom is fully in for stocks. There remains a distinct possibility that this 25%+ bounce since June amounts to a bull trap before renewed downside. Caution is warranted.
How To Navigate the Volatility
With volatility expected to continue, having a risk management plan grows increasingly important. This is where leveraged trading strategies can help.
I’ve used algorithmic bots to automatically enter and exit positions amidst the choppiness. They remove the human emotion element.
My Bitcoin and Ethereum bots have accumulated more long positions on this dip, now up to 4 and 7 trades respectively. I’ve now lowered their take profit targets to lock in returns faster before starting new cycles.
For anyone interested, I’ve shared one-click setup links in the description to use these bots yourself. They include up to $30,000 in signup bonuses at the moment.
The key is managing risk and not over-leveraging. Start small if new to leverage. Let the algorithms do the heavy lifting.
Tether Lending Surges
Notable updates in the stablecoin sector could have market implications.
Tether has significantly expanded its lending operation, adding another $200 million this past week. Their outstanding loans now total $5.5 billion. Major speculation points to Binance and Justin Sun as the leading borrowers.
Sun apparently took out $200 million in Tether’s rival stablecoin USDT recently. This likely explains Tether’s ramp up in lending activity – to compete with serious rivals entering the space.
Rapid stablecoin loan growth undoubtedly influences markets. It allows leveraged positions to expand. The lack of transparency around these deals also raises eyebrows.
While details remain limited, the accelerating competition in this niche stablecoin sector merits close attention. Especially considering stablecoins’ integral role in crypto liquidity.
Mt. Gox Bitcoin Sale Deadline Extended
Mt. Gox, the infamous early crypto exchange that collapsed in 2014, has extended its deadline for liquidating 141,000 Bitcoin from its bankruptcy holdings.
Originally mandated to sell by March 2022, creditors have now cleared selling to continue through September 2024. However, distribution could begin as early as Q4 2023.
This huge Bitcoin stash represents significant potential selling pressure. However, creditors have financial incentive to minimize impact on the open market. Large OTC sales or tranched distributions are likely.
Regardless, the looming impact of this liquidation merits monitoring. The exact timing and magnitude can’t be predicted. But markets will inevitably feel the effects.
In summary, the road ahead looks rocky. We face a hazardous macro environment, uncertainty around key support levels, potential stablecoin ripples, and the Mt. Gox overhang.
Yet within volatility lies opportunity. By steering clear of hype and grounding decisions in data, we can responsibly navigate the turbulence. Patience and calculated trading will prevail.
Here’s to a prosperous rest of 2022! Please leave your thoughts in the comments below.