Fake-out confirmed? 🥶 - Feb. Market Update

Hey team. Wanted to get this quick market breakdown out before the week started.

We’ll go over a few KEY factors that might just dictate the direction of markets moving forward in 2023, 2024.

Let’s dive right in…

As we pointed out in our previous post on Gold, the Dollar, and Bitcoin here, we were keeping an eye the important $100 support level on the $DXY (US dollar) chart.

Turns out our previous analysis appears to be playing out as we predicted, with the $DXY slingshotting off that $100 support level last week.

Combine that with a MONSTROUS jobs report coming in MUCH higher than expectations, markets will now be asking whether the FED is truly doing enough to control inflation.

“But inflation is coming down?” Yes. But the FED’s job right now is to basically “break” something and engineer some sort of recession to ensure inflation doesn’t persist or come back up.

In other words; good news from the economy) = bad news for the FED/markets, and bad news from the economy = good news for the FED/markets (means they’re doing their job).

“OK OK…but what does this mean for equities & my precious Bitcoin?”

Short term answer; nothing good.

Looking at the Daily Bitcoin chart, we can see a hard smackdown from the $24K resistance level.

We’ve marked the $25K level because everyone and their mother are calling for a smooth reclaim and test of $25K.

This is a psychological & key resistance level that plenty of people would LOVE to short a potential pullback on. Unfortunately, that’s not how markets work.

Not to mention the Momentum 2.0 indicator is showing signs of Bitcoin being overbought.

Combine that with the bounce in the $DXY, and we might have some pullback pain ahead for those “buying this dip” and those waiting to short at $25K.

Eyes peeled out there across all markets this week.

Just our thoughts…maybe we’re being too bearish. Either way, figured the community might find this valuable!

Hope you all have a fantastic week out on the charts.

Cheers!

-The AlgoBuddy Team