Market pain just starting...🫡📉

What’s up traders,

What a week of events we’ve had in the markets…

Some key stories since we last wrote include:

  • Silicon Valley Bank going under

  • The unemployment rate jumped up to 3.6%

  • USDC de-pegging after Silicon Valley Bank fears

  • Silvergate Capital also going under (big crypto bank)

  • Hawkish FED stance (possible 50bps hike coming)

Alright alright…let’s dive in.

We mentioned in our previous newsletter that there was a broadening formation occurring on the daily S&P chart:

Here we are now:

This was a combination of the 2022 downward trend line zone and the 2023 upward trend line zone.

This is an absolutely critical time for bulls to fight, otherwise, if this downward trend zone fails it will fail hard. Then we’ll be expecting a retest and further declines. 

We like a small long at these current levels to attempt to capitalize on the broadening pattern, but we don’t want to be long big in a major downtrend with interest rates still high.

We’ve talked about this before and we’ll say it again here, there needs to be a big flush “oh god” moment for this bear market, and we haven’t gotten it yet. 

Before we become bulls, we need to see the fed make moves to encourage growth, not slow it down. 

So what does this mean for us crypto traders?

Looking at the 4H Bitcoin chart

We’re seeing a nice relief rally in the wake of all this banking / USDC fud.

We’ve mapped out a few levels we’ll be paying attention to in the coming days.

The 2 light-blue demand zones would be where we would expect a pullback into. If we break below 20K again, we’re not confident the bulls can put up a decent fight.

However, if the bears can’t stand in their way and this run up continues, look for the 21.5 level as a key resistance.

Break through & hold above, and we could see the run to 25K resume.

Our gut tells us this is just another scam pump, given just how hawkish the FED was during their congress tour, and how this SVB situation will play out.

Also, BIG inflation numbers coming this week so expect some volatility.

Good luck out there team. Oh, and a friendly remind — risk management is #1 so keep your eyes peeled and stops on the chart.

If you’re wondering where we trade crypto, we use OKX & right now you can unlock up to a $10,000 bonus when signing up using our link!

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See ya in the next one.

-The AlgoBuddy Team