Wednesday 31st August 2022.
Last week :
This past week saw investors de-risk as BTC hit 20,500s levels and tested the 21,000 support before consolidating higher towards 21,700 levels and falling back to 20,000 levels by end of week.
Price action was characterized by sideway and flat moves in anticipation of the Jackson Hole’s symposium speech of J Powell. Prices then moved downward as J. Powell reiterated on Friday the Fed’s monetary policy tightening intentions. Bitcoin’s co-dependence with tech assets continues to prove true, hampering its ability to move higher against a background of macro headwinds.
Besides the hawkish intentions from the Fed leading to a tightening of the US term structure, the appreciation of the US dollar is driving the price of energy higher -affecting the profitability of crypto mining, which could add fuel to the downturn markets have been going through this past week.
Client Profits:
We chose to keep a conservative approach this week and maintained little exposure to the market.
Our portfolio position breakdown is still composed on average at 70% in $ cash and we still hold little risk exposure to BTC and a few large-cap coins.
That said, we don’t plan to exit our existing positions for now. We also took advantage of the dip to enter on some large coins – SOL, AVAX, LINK.
On the short term :
We don’t think the upsloping support of our parallel channel acting as resistance around the 23,000 levels will be broken in the near future.
BTC:
BTC retraced and is now trading in a narrow range around $20,000 as investors started to take less risks after Federal Reserve Chair J Powell reiterated the Fed’s commitment to keep raising rates to fight against inflation. We could see price action move below the $20,000 level that acted as a support in recent months with long-term support in the $17,500 area – then next support would be 12K/13K.
ETH :
Regarding our outlook for ETH, the macro headwinds lead the price action to fall towards the 1,450 levels.
However, the strong rally ETH experienced during the summer could suggest a consolidation period with little room for a downturn.
We might see ETH reaching back up to $1,950 levels, but the stock market should make a nice move to the upside at the beginning of September, or we might see the continuation of the downside move to lowers levels in the 1,300s.
Thank you!
CFT Team.