Bears & bulls - who comes out alive? 🩸⚔️

What’s up team.

So if you're in our discord, you've seen us talk about the wondrous price action of broadening formations many times.

It's almost to a tee that price tends to expand forming what some people call the megaphone pattern. 

We personally like to think of it like this: a single bull and bear meet out back and fight it out one day, then they take a breather.

Then they bring more bulls and bears to fight again the next day causing price to whip saw pushing higher highs and lower lows. 

We see it very often. 

Today, we're continuing to focus on our daily s&p chart, and we're seeing one develop right before our eyes.

That's if price can break down enough to test the top of the yearly downward sloping trend zone.

It would be very surprising, (and not very probable) that we see another strong bounce off the upward sloping white rectangle trend zone.

However, we can see the unfilled gap that was left at 4080-90 filling before the next leg down. 

Overall, we want to see this broadening formation start to play out between these two strong trend line zones.

This pattern is what we will be eyeing and trading around these next few weeks, as long as price starts to ping pong between them. 

Obviously things can change on a dime, and price could cut right through the year long downward trend zone.

For now this is our 30,000 ft. birds eye view that we'll be anticipating trading around.

Switching gears to look at the Bitcoin Hourly chart real quick. We can see some strong resilience in recent days.

In fact, with all the bearishness going on in other markets is crypto FINALLY showing signs of…dare we say again… decoupling?

Although this might be taken as bullish, we do have to always consider the overall macro sentiment.

Which right now is showing a sticky inflation, rumors of a 50 basis point hike at the next FOMC, and a seemingly overpriced equities market.

We’ve been crabbing in this 22.7 - 23.6 range the last few days, with the bulls & bears battling for control.

Price has rejected off that 200 EMA multiple times now (light blue box), so it will be interesting to see if this is hinting at a potential leg down.

If we do leg down, like we’ve said in our previous Substack posts, 21.5 remains the next strong support level.

Really quick, we ALWAYS have to consider the DXY chart when trying to predict the direction of any market.

We’ve seen a massive run up from the $100 level, and it seems there’s a magnet up towards that $105 level, which was the December high.

If you’re not aware; DXY goes up = stocks/crypto go down (usually), and vice versa.

That’s all we got for you today.

As always, eyes peeled out there folks.

Oh also — we teamed up with OKX as it seamlessly connects to our AI crypto bot for auto-execution. We’ve also really enjoyed their entire exchange overall.

You can unlock up to a $10,000 bonus when signing up 👉 OKX Sign Up

We’ll see ya in the next one!

-The AlgoBuddy Team