Cryptocurrencies and stock market volatility are expected to increase significantly this week due to the CPI press, interest rate hikes and Federal Reserve Chairman Jerome Powell’s conference call.
Consumer Price Index (CPI) data from December 13 and the outcome of the Federal Reserve meeting on December 14 could affect the US stock market and the cryptocurrency market in the near future.
Traders are likely to play it safe and not make a big move until the CPI is released, as any serious shock could trigger a knee-jerk reaction.
Daily cryptocurrency market performance. Source: Coin360
Some analysts believe in Bitcoin.
It could fall further before bottoming out, but Arthur Hayes, former CEO of crypto derivatives platform Bitmex, believes bitcoin may be past its worst phase for this cycle.
Speaking to podcaster and independent market analyst Scott Melker, Hayes believes that “large and irresponsible companies” have largely dumped their bitcoins and that “almost everyone that could fail did.” Hayes expects bitcoin to be resilient until 2023.
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The bullish failure of the S&P 500 Index ( SPX ) to break above the trend line could tempt short-term traders to take profits. The price fell on December 1 and broke below its 20-day moving average (EMA) on December 6 at 3,958.
SPX Daily Chart. Source: TradingView
Bears are trying to retrace the 20-day EMA. If successful, the index could sell higher and break below the current support at 3,918. That could set the price at its 50-day simple moving average (SMA) of 3,847.
Also, if the EMA price rises and falls for more than 20 days, it indicates a low level of demand. The index can then move downwards. A break above this level may indicate a possible process change. The index could then rise to 4,300.
The US Dollar Index (DXY) appeared near critical support at 105 the other day. A pullback pulled the price below this level on December 1st, but upside buying started to recover around 104 on December 5th.
DXY daily chart. Source: TradingView
However, the high did not even reach the 20-day EMA of 106, suggesting that in any small rally the bottom is being sold strongly. Bearish pulls price below 104 and tries to start a new low. If this level is broken, the next chapter could be 102 and then 100 on the psychological level.
If the bulls want to stop the decline, they need to quickly push above the 20-day EMA price. The index could then reach the high resistance of 108.
BTC / USDT
Bitcoin has been stuck between $16,678 and $17,424 in recent days. This indicates that the bearish price is holding resistance above the $17,622 price and that the upside is buying a slight decline.
BTC/USDT Daily Chart. Source: TradingView
Typically, a narrow boundary increases variability but makes it difficult to predict the direction of failure. Therefore, it is advisable to wait for the price to break the resistance above or below the support before taking a directional bet.
If the price closes above the 50-day SMA of $17,911, these gains could favor buyers. That could pave the way for a possible rally.
On the other hand, if the price falls below $16,678, many buyers will be forced to close their positions. That could be interesting for BTC/Tether
two pairs up to $15,476.
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It is known as ETH/USDT
On the last day, the 20-day EMA was near $1,255. This shows the uncertainty of Taurus and Bear
ETH/USDT Daily Chart. Source: TradingView
The flat moving averages and relative strength index (RSI) near the midpoint do not give a clear advantage to the bulls or bears. The ETH/USDT pair has been trading between $1,218 and $1,309 for some time now.
The first sign of strength is a break above and around the 50-day SMA at $1326. That could open the door for lines of resistance to converge down the road.