WTF on Friday Markets, 15.12

Correction or trend reversal?

Disclaimer: Technical analysis is a way of analyzing the financial market based on statistical patterns. Drawing lines on the chart itself does not predict price movements, but only helps the analyst to visualize the results of different types of analysis (macroeconomical, fundamental, technical, etc.). The analysis is not a financial recommendation, although it can be used to make trading decisions. Current analysis may become irrelevant if market conditions change dramatically. Good analysis does not always lead to good trading decisions, and vice versa.

Macro

The week started with the first significant correction in three months of the uptrend. The reason for this was the worsening of market sentiment among major players caused by US labor market data, as well as the emergence of the anti-money laundering bill from U.S. Senator Elizabeth Warren.

The FOMC meeting, meanwhile, was very dovish; Powell publicly denied further rate hikes and pledged three rate cuts next year. Markets, in turn, expect six key rate cuts. While the stock indices rushed to ATH, there was a major deleveraging in crypto, yet Bitcoin held above $40k.

BTC

The key question at this point is: how much of the ETF approval is priced in? Given that no one doubts approval, it is predominantly built into the price. Regardless of how much approval is priced in, there will be a pump on the news itself, and only then will a full-blown market cooling, up to and including a local market shift, be visible. Until then, it’s just a correction that allows for a dip all the way down to $32k. But the most probable limit of correction is the zone of $37k — $39k.

ETH

Ethereum season ended before it started. At the moment, $ETH is stuck somewhere in the middle of the current trading range. Good entry points are above $2500 and below $2000, and the asset is no longer interesting until it reaches the upper or lower edge of the range.

STX

Stacks ecosystem has been the main beneficiary of the brc-20 trend, on local DEX Alexlab brc-20 tokens can be traded. The main announcement of Stacks is still ahead: the release of sBTC, but the chart looks like a trend reversal already. Bitcoin must remain strong, and $STX price shouldn’t print a lower low, meaning it should go below $0.81.