The S&P 500 stole the show today with a 2% selloff, and the futures market isn’t doing us any favors at the moment either.
In today’s issue, we’ll discuss the future for the S&P 500, DXY, BTC, and ETH. We’ll then wrap things up with the WEAPON and KITTY GameFi tokens.
S&P 500 (SPX500)
The S&P 500 has looked better. What started as a continuation of Tuesday’s bounce from 4,240 ended with a 2% loss, which is accelerating after hours.
Stocks are still the number one risk assets so they tend to drag everything with them, including Bitcoin.
We’ll see how Thursday pans out. Today’s close either triggers more selling early tomorrow or we get a sharp bounce back above 4,240.
If we do see lower prices from the S&P into March, I’d keep a close eye on the 4,000 area. That’s a key horizontal region that happens to line up with the bottom of a descending channel.
Resistance above 4,240, on the other hand, comes in around 4,400.
US Dollar Index (DXY)
The DXY is slightly higher today following a bloodbath in the stock market. That said, we aren’t seeing the kind of rally from the US dollar to signal a full risk-off environment, at least not yet.
As you can tell, the chart is still in no man’s land, which has been the case since November. At this point, we’re just waiting to see if it breaks below 95.13 or above 97.50.
In terms of the crypto market and risk assets overall, a break lower from the DXY would be ideal as that would signal a willingness to risk capital from market participants.
Bitcoin broke out from the descending broadening wedge we’ve looked at over the past few days. It even came close to testing the $39,600 resistance area.
However, US stocks had other plans with the S&P 500 closing 2% down on the day. That dragged Bitcoin lower, negating the breakout earlier in the morning.
So for now, it’s a matter of waiting to see if bulls can hold onto the $36,000 support area this week. Below that is $35,000.
As I’ve mentioned a few times this week, Bitcoin needs to get back above $39,600 on a daily closing basis to turn constructive again. So far, buyers haven’t been able to do that.
Below the $35,000 region is the fourteen-month range low at $30,000. Alternatively, a daily close above $39,600 would open up $42,000 and $46,000.
ETH is attempting to hold above $2,570 support. That’s a minor level that came into play a few days ago.
However, the much bigger area for Ethereum lies between $2,800 and $2,900. It’s going to take a daily close above that region to expose higher levels. ETH is on shaky ground until then.
A daily close below $2,570 would open up $2,300 while a close above $2,900 would expose $3,100.
It’s a big day for the MEGAWEAPON project. Not only because the WEAPON token is up 22% today, but also that Certik is showing that the audit is 99% complete as of this morning.
That’s significant as the audit and legal are the two things holding up staking. A 99% progress status on the audit tells me that it should wrap up any day now, which just leaves the green light from legal.
But the important thing here is that progress is being made on all fronts. I continue to think that staking will be the catalyst for a breakout from WEAPON, especially when you consider the 3% bonus.
Since December 23rd, 3% of the daily volume has been accruing for future stakers. That gets added to the normal 2% of daily volume once staking launches, which means at least two months of increased rewards. The best part is that those rewards will be paid out in ETH.
As for the chart, it did break below the trend line we had been watching for the last few weeks. However, the market is catching a nice bid from the $1.40 area.
If it can get above the $2 region in the coming days, the $3.50-$4 area is next, in my opinion.
I continue to like the WEAPON token higher in 2022 with a $10-$20 target at a minimum. That assumes staking is live and the full play-to-earn game is launched later this year.
Kitty Inu (KITTYUSD)
The kitty token has taken a beating in recent months. That’s partly due to the team focusing on developing the Kitty Kart play-and-earn game, and also Bitcoin pulling back 50%.
However, the good news is that the beta release of the game launches this week! Not only that, but I’ll be playing it first-hand this Friday. So I’m definitely looking forward to that!
I continue to think the token is undervalued with the project trading at a mere $8.7 million market cap. That’s especially true when you consider that the beta launches this week.
The big catalyst for the kitty token in the coming months is no doubt a tier 1 central exchange listing. The team has had their eyes on it since launching, so once the token has utility they can move forward.
Most tokens that get listed on Coinbase or Binance don’t sit below a $300-500 million market cap for long. So you can see the potential with this trading at an $8.7 million cap today.