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Issue 159 – DXY Breakdown in Focus

February 3, 2022


The crypto market remains relatively quiet. However, the DXY is doing something that could relieve some pressure from risk assets and even trigger a risk-on move in the coming weeks.

We’ll discuss that in detail, as well as the S&P 500, Bitcoin, Ethereum, MEGAWEAPON, and Legends of Kori in today’s issue.

Let’s get it!


US Dollar Index (DXY)

The DXY continues to fall following the confirmed false break three days ago. I pointed this out on Twitter and also discussed it with members.

That false break was likely to trigger a move back to 95.50, which it has and then some.

However, a close below 94.60 is needed to reverse the trend. Until that time, the USD is in an uptrend outlined by higher highs and lows.

DXY (daily time frame)

S&P 500 (SPX500)

The S&P 500 is holding above 4,500, which is a key area we’ve discussed at length this week.

Many on Twitter thought the market would sell-off from this area today. However, I wasn’t so certain, which is something I voiced in Tuesday’s member-only video.

When you have an area like 4,500, it’s important to watch how the market reacts to it. And until we see a close back below 4,500, this area is serving as support.

I also continue to be impressed by the volume. It’s some of the highest ever on a weekly basis. That’s typical at turning points in the market.

As long as the 4,500 area holds as support, I like the S&P higher toward 4,700 resistance.

S&P 500 (daily time frame)

Bitcoin (BTCUSDT)

Bitcoin is weaker today following a series of lower highs from the daily volume since January 24th. I discussed this in Tuesday’s YouTube video.

A market making higher highs and lows like Bitcoin has since $33,000 on decreasing volume is a sign of weakness, which we’re seeing today.

But I don’t think we see $30,000 BTC, at least not immediately. I’ve written about the significance of the $35,000 support area before, and I think it makes little sense to assume $30,000 while above $35,000.

That’s not to say it can’t happen. I’ll be the first to tell you that anything can happen, especially in a market as volatile as Bitcoin.

With that said, I think many are ignoring the potential for a retest of the $35,000 region followed by a strong bounce from there.

Regardless, BTCUSDT needs to close above the $42,000 area to confirm a bullish breakout and expose $45,000-$46,000.

BTCUSDT (daily time frame)

Ethereum (ETHUSDT)

It’s no surprise to see Ethereum pulling back today alongside Bitcoin. But just like BTC, ETH has some key support just below its current price.

I’ve discussed the descending channel a few times in recent weeks. We saw ETHUSDT break below support on January 21st, but we’ve since seen bulls reclaim that level.

So it will be interesting to see if buyers can defend that $2,500 area going forward and potentially carve a higher low.

If not, and we see Ethereum close below $2,500, then the $2,200 support is next, followed by the $2,000 area.

But if bulls can hold $2,500, the next big test is $2,800-$2,900, followed by $3,100.

ETHUSDT (daily time frame)

MEGAWEAPON (WEAPONUSD)

I love the look of the WEAPON chart. I’ve discussed this play-to-earn token many times since December when it was trading at $1.

It’s done a 4x since then with a move above $4 in January. But I continue to think the consolidation since late November is setting the stage for a big run this quarter.

In fact, the terminal pattern below hints at a breakout sometime this month. What we don’t know is which direction WEAPONUSD will break.

But given that staking goes live as soon as the Certik audit wraps up, and the game launches later this quarter, I think the odds are stacked for a bullish breakout.

A percentage objective puts the target for the MEGAWEAPON token near $20. That’s not outlandish considering it would put the market cap at $200 million.

Keep in mind that a move to $10 or $20 could take weeks if not months. For now, though, support comes in just below $2 with resistance up around $4.

WEAPONUSD (daily time frame)

Legends of Kori (KORIUSD)

KORI is a play-to-earn token that I announced publicly last week when the market cap was just $4 million.

Fast forward to today, and KORI reached a new all-time high briefly at $8 million, or a 100% gain since I posted about it.

However, I haven’t sold any, nor do I plan to as I think there’s too much potential in the coming months.

We know the team recently signed AAA concept artist Shaddy Safadi, and they also signed a game developer this week. That announcement is pending.

I think the combination of concept art from Shaddy and the game developer announcement sends KORI to $10 million plus in the coming weeks.

The $6 million area should serve as support moving forward.

KORIUSD (daily time frame)

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Justin Bennett

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About the Author

I'm Justin Bennett, a currency trader turned crypto enthusiast.

My journey started with stocks in 2002. After limited success, I transitioned to currencies in 2007, which later became a full time trading gig.

The journey continued, and in 2020, I committed to learning about cryptocurrencies. It was love at first sight.

Cryptocademy.com is the culmination of my love for cryptocurrencies, my passion for financial markets, and desire to learn and teach.

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