Trading BTC
Note the 200 MA & 55 MA are still trending directly toward the confluence zone of the two upper diagonal resistance lines and the horizontal resistance line at ~21,735 (the yellow circle). One of 3 things is likely to happen with BTC (surprise!):
- Trend sideways over the weekend within the current pennant ranges.
- Spring upward out of the current bear pennant toward the upper resistances.
- Drop Further out of the bottom range of the current bear pennant toward the lower supports.
![This is how I intend to trade BTC. [If we begin to trend sideways, I will alter my strategy and trade the pennant ranges.]](https://deweb-519a7.b-cdn.net/post-images/97f03b60-1a6c-47b2-899d-09d70b1feff0.png)
This is how I intend to trade BTC. [If we begin to trend sideways, I will alter my strategy and trade the pennant ranges.]Despite being oversold (albeit with a flat Stochastic RSI), with price trending down atm, and being in a bearish pennant, BTC to me feels like it's wanting to spring upward. If it does, there's between ~3% and ~8.5% potential upside. I would anticipate a jump to the ~20,800 resistance, after which we trend sideways until the Fed announcement.
If BTC drops the pennant, the next two major resistances offer between ~4.8% and 11.8% downside. If BTC hits the second low, this could signal the market pricing in an expectation of the Fed raising interest rates by as much as 100 basis points. Should Powell then only raise by 75 points, the morning of the announcement we could see a retrace, possibly as far up as the confluence zone (or the resistance just above), though not likely that far. If you're in this camp, be careful, we could very easily get another market manipulation dump this weekend on low volume.
Should we trend sideways, I see that as a bullish sign, telegraphing the market's expectation that the Fed will raise rates by only 75 basis points. If 75 is, in fact, the increase announced, we'll probably see that same market rebound, up to (possibly) the confluence zone (or the resistance just above).
Why am I hesitantly short-term bullish? The DXY has had one of its steepest climbs in recent history. I don't want to say it can't keep going up, but if it does, that will be disastrous for the US and global economies. With elections coming up, I also feel Powell will take as dovish a position as he thinks he can get away with.
TRADE WISELY. And remember, taters are for eating, not financial advice.
