Dec 13, 2021 4 min read

Hold the floor

Cryptic ball: let's hope $46k is lava.

As explained Friday, what's holding bitcoin and the rest of the crypto market together is the support level around $46k - where the important 200-day moving average is currently lying. That key area was tested twice so far: 1) on Saturday, with a bounce to $50k on Sunday which was clearly rejected; 2) and right now, with a possible bounce playing out, albeit on low volume and without confidence. So, as usual, what can you expect for the tough week ahead?

Well, the range bitcoin is trading is still defining sentiment across the board. But this Wednesday we'll have an important event that's affecting the markets: the US Federal Reserve's December two-day meeting, which starts tomorrow, comes to an end with a press conference that will dictate the mood of the markets for the rest of the year. Now, I don't think Jerome Powell wants to ruin Christmas for investors, but inflation is also ruining Christmas for most families.

But some reporters are painting a grim picture, hinting that the Fed's chair may announce a faster rate at which it implements monetary tightening policies to mitigate the rise of consumer prices. And that's bad for the rise of risky asset prices, from tech stonks to crypto. However, it's also the case that the stock market's performance heavily influences elections, and Democrats can't lose their mid-terms next November - so Powell has a tough balance to manage.

In other words, there's a lot of uncertainty surrounding all risky assets, right now. Such an environment promotes sideways trading and slow-bleeds, as described in Friday's newsletter regarding bitcoin testing $42k if $46k fails, after which all hell could break loose like last summer. Anyway, I don't expect much action until Wednesday. And it's also true shorts are on the rise, which creates nice liquidation material for bulls to squeeze them. Just stay safe and have a plan.

Chart art: let's hope stonks pump.

This is why I keep talking about global equities - BTC is heavily correlated with them. However, it's also important to know many risky tech stocks have dumped as much as crypto, even if the S&P500 and Nasdaq are trading near their all-time highs.

Four things: let's hope that extra one is right.

Hasu and Su Zhu talk about Ethereum and its Layer-1 competitors. Spotify or YouTube?
Ming Zhao shared "12 Crypto Hedge Fund Trading Strategies".
Chris Dixon expands on "the seven types of NFTs he is excited about".
Zaheer explains why the crypto market isn't hot at all.

Tweet tip: let's hope they can please both.

*It's also true that inflation hurts elections. Which is going to be, stonks or food? Because you can't keep the stock market afloat without being comfortable with some inflation.*

Meme moment: let's hope you don't fall for this.

*Be careful when buying NFTs. Not only the NFT market is dumping hard, as NFTs are highly illiquid as I've often written, but it's also a perfect place to be scammed.*

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Our newsletter offers opinions and insights from analysts in the cryptoasset space. It is not intended to be investment advice, and should not be treated as such. You must not rely on its information as an alternative to financial advice from a qualified professional. Without prejudice, we do not undertake or guarantee that its information is correct, complete or non-misleading; or that the use of guidance in the report will lead to any particular outcome or result.