On this Wednesday, July 27, 2022, bitcoin is stagnant and struggling to register new short-term highs. However he manages to preserve the $20,000 zone. Although some analysts have been speculating about an upward recovery since the range, views are more mixed at the end of the month and a bull trap is back in the spotlight as the preferred scenario. As predicted, July was a bullish month for our digital gold. However, the pessimist is still in charge of all the markets, especially because of macroeconomics that has not been seen for many years, but above all, because of the markets which are withdrawing much of the rise with recent years. Let’s start right away with this week’s 360 bitcoin tip. I will try to be as complete as possible when sharing my feelings about the deal. Good read!
Bitcoin returns to its range
Bitcoin is losing key support at the end of July. The $22,000 level is very important and unfortunately did not hold. They propose the situation where there is a bull trap that has been very present in the ecosystem for the past few weeks.
While a flag pattern above the $22,000 level could indicate support that the uptrend continues in the short term, the breakout of the support has ended any hope that bitcoin will see new highs again.
The chart below shows the bull trap or bullish trap pattern. Breakout of resistance and often a range that suggests a strong rise. Finally, re-consolidation just before new lows are sought and a decline period begins.
S&P500 under resistance
The US index is showing little or no weakness. It bounced nicely off the 0.70 Fibonacci level before trying to touch the resistance at $4150 again. As long as we are below this technical level, I see an index that is likely to suffer for much of the year. Furthermore, oblique resistance at the same level is a barrier for buyers who would like to position themselves at those levels.
In case of a fall, the $3,300 level would already be a good support to reposition yourself for buying.
In the short term, the support at $3,900 leaves the advantage to the buyers. If this level is broken, things will be different and a new low could be registered.
News as a catalyst for the coming days
Technological giants such as Google or Microsoft have grown in recent times.
Microsoft Corporation ( MSFT ) gained 2.9% on Wednesday despite the tech giant reporting weaker-than-expected fourth-quarter results and saying Windows revenue hit more than $300 million . For the period ended June 30, Microsoft earned $2.23 per share on revenue of $51.9 billion, up 12% from a year earlier, the lowest growth in two years.
At the start of the pre-market session on Wednesday, shares of Alphabet (aka Google) rose 3.9% despite a slight deviation from estimates that dampened the spirits of some investors. Alphabet’s revenue rose 12.6% to $69.69 billion, slightly below expectations of $69.8 billion.
So we observe results that are disappointing, compared to the estimates, but which nevertheless meet the expectations of a good number of investors, because the period is so complex.
Conversely, Shopify shares were down 6.5% in early trading. Earnings came in lower than expected with net earnings per share of -$0.03 in the second quarter, missing estimates by $0.06. The stock also lost $30 million in revenue.
Therefore the results of large companies like this are very important in the sense that the crypto market has a strong correlation with traditional markets.
The Federal Open Market Committee, which means in French the Federal Open Market Committee, is an organ of the American Federal Reserve, responsible for monitoring all open market operations in the United States. As such it is the main tool of American monetary policy.
After considering short-term policy, the FOMC establishes the target rate of federal funds which will achieve the set objectives. The decision will be made public this evening and a clearer direction can be established after this decision.
The market as a whole has absorbed the latest rate hikes fairly well. Will this trend continue?
History shows that since the Fed started raising rates in mid-March, the S&P is down about 10%, but the index itself has actually gained 1.5% or more on each of the three days of feed rate increases.
On the first day of the 25bps hike, the S&P was up 2.2%, the second 50bps hike brought the index up 3%, and the final 75bps hike boosted the S&P 500 up 1.5%.
As the market opened on Wednesday, the S&P 500 gained 1.1% in early trading, helping to reinforce the trend.
From the prospect of a rate hike, markets are now pricing in a 75 basis point hike, with a lower probability of 100 basis points this afternoon, as all eyes are on the FOMC decision.
In any case, a high probability will be expected and a stop loss would be preferred to deal with the latter.
That’s it for today’s article. I tried to cover as many points as possible and focus more on the traditional market leading cryptos. Talking about altcoins here makes a lot less sense than macro analysis to me.
Finally, I get numerous questions asked on the site where I analyze my values. Personally, and for many years, I am using TradingView, an intuitive interface with many tools and a wide selection of assets. It is clearly the most advanced and widely used interface on the market.
This is the end of this analysis, feel free to give me feedback on my Twitter account @0xakin. Don’t be too fat, take profits regularly, be successful money management for your trades and depending on your initial plan. Only invest what you can afford to lose as long as it doesn’t affect your morale too much. Have a great week everyone, and I’ll see you next week for a new analysis!
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I am passionate about technical analysis and technology, I have been enthusiastically following cryptocurrencies since 2017. Besides trading and investing, I want to democratize, in my own way, the ecosystem that will undoubtedly change our habits tomorrow!