Between the Fed rate decision and Chair Powell’s statement, everyone was on their toes today, including Crypto Twitter.
As mentioned previously, the US dollar and interest rates matter for crypto, especially while inflation is such a hot topic.
That’s why we’ll talk about both in today’s issue. I’ll also discuss a Bitcoin terminal pattern that’s worth keeping on your radar.
Plus, updates on the DXY, ETH, and XTZ, as well as our two play-to-earn tokens, kitty and WEAPON.
Let’s get it!
FOMC Aftermath
With FOMC behind us, we can start evaluating where things stand.
First and foremost, the DXY, which is the US dollar index is selling off. That’s always a good sign if you’re looking for strength from Bitcoin.
As for BTC, it’s been holding the April trend line near $46,000 all month. It wicked below it on the 4th but recovered quickly.
Now the test is $53,000 BTC. That’s the big one! Everything is a bit dicey until Bitcoin reclaims that level on a daily closing basis.
My main points of focus right now are the DXY breaking below support levels I discuss in today’s video and Bitcoin getting back above $50,000 and $53,000.
Until then, any positions I take will be lighter than usual.
US Dollar Index (DXY)
The US dollar started off strong going into today’s FOMC. However, it started to struggle as soon as Chair Powell began taking questions.
As I type this, the market is sitting on 96.40 support, which is the top of a short-term triangle that we’ve discussed for the last few days.
A daily close below that level would confirm the false break and likely send the DXY lower. Alternatively, a close above 96.40 or so would keep the level intact as support.
Remember that we want a lower DXY to lift some of the pressure off of cryptos.
Bitcoin (BTCUSDT)
Bitcoin is enjoying a nice rally today on the back of FOMC as the market continues to respect the April trend line at $46,000.
However, the big test for BTC is $53,000. That’s going to be a massive hurdle for buyers.
If it can get above that in the coming days, then a move to $70,000 seems likely.
That said, I’d be surprised to see a break above $53,000 without more consolidation first. Losing that area on December 4th was a big deal, so it may take some time for BTC to regroup.
Support is $46,000 and $42,000.
Ethereum (ETHUSDT)
ETH is once again outperforming BTC today after testing the confluence of support around $3,700. We’ve discussed this support area for the last few weeks.
A daily close above $4,000 would flip the area back to support. Key resistance comes in at $4,200 with a close above that opening up $4,600.
Tezos (XTZUSDT)
I still like the overall look of XTZ. While buyers have some work to do to push prices back above $4.60, there is a potential inverse head and shoulders here.
But the first test for buyers is to secure a daily close above $4.60 and then confirm the reversal pattern with a close above $6.
Obviously, XTZUSDT has a long way to go.
Still, if it pans out, the objective is just above $8, so there’s considerable room for the market to run as long as Bitcoin can remain healthy.
A move below $3.70 would negate the idea.
Kitty Inu (KITTYUSD)
Kitty is the play-to-earn (P2E) token that I mentioned at the end of October. After a 250% rally shortly thereafter, the market has pulled back about 70% from the all-time high.
I’ve held through the pullback and even bought a little more this week. I still think the project has a ton of potential and it’s only getting started.
As always, none of this is financial advice. Furthermore, any new project will always carry more risks, but it also offers greater upside if things work out, so take that for what it’s worth.
They’re still on track to launch the beta version of the game in late January of 2022.
MegaWeapon (WEAPONUSD)
WEAPON is another P2E token I’ve mentioned recently. I started talking about it (and buying it) just above $1.
Considering the volatility from Bitcoin lately, I’d say the token is holding up incredibly well, especially considering it’s trading at $1.40 today.
The team is still on track to launch staking this month and the battle arena style P2E game in Q1 of next year.
Also remember that there are only 10 million tokens, so the current market cap is just $14 million, which I think is still very low all things considered.
Of course, none of this is financial advice. Be sure to do your research before you buy.
