The crypto market braced today for what was expected to be one of the more market-moving FOMCs of the last few years.
However, after a brief dip leading up to Chair Powell’s remarks, Bitcoin and the rest of the crypto market rallied quite significantly.
So in today’s issue, I discuss what it’s going to take for BTC and ETH to break out as well as some targets. I also use the DXY and TOTAL charts to back up my thoughts.
Plus, we look at a SOL setup with tremendous potential over the next few weeks.
US Dollar Index (DXY)
The DXY is finally selling off today after breaking below channel support ahead of today’s FOMC.
The next test is the area just below 98. That’s going to be support for the DXY with a close below that region opening up 96.50.
A move toward that 96 area is what it’s going to take for BTC, ETH, etc. to move significantly higher.
I’m anticipating a further pullback as long as DXY is below that 99.4 area.
Total Crypto Market Cap (TOTAL)
The total crypto market cap chart looks ready to break out this week. Ideally, I’d like to see this break higher for a retest of at least the $2T area.
However, we don’t have a confirmed breakout just yet.
Alternatively, a rotation lower is likely to find support around $1.65T.
A breakout from the chart below will add conviction to any moves we see from cryptos.
Bitcoin is lagging ETH in terms of structure. While ETH is on the brink of breaking out today, BTC is still well below the $46,000 region.
For this reason and the look of the ETHBTC chart that we discussed yesterday, I’m a fan of longing ETH over BTC right now.
However, an eventual close above $46,000 would be incredibly bullish if Bitcoin can pull it off as it would expose $53,000-$55,000.
The $37,000 area remains key support.
ETH is testing the November trend line today on the back of a 6% rally. At the moment, that level comes in just below $2,800.
A daily close above that area should confirm the breakout and expose $3,000. That will be the next test for buyers.
Above $3,000 and I think we see Ethereum sprint toward $3,600.
Alternatively, a close below resistance would keep the triangle intact with support just above $2,500.
SOL is starting to break out today. We discussed this set up in yesterday’s issue.
However, I still need to see the market close the day above the $85 area to confirm it. Until then, this is a bit speculative.
If SOL can break free from this trend line, I think a move up to $118 could be next. Any close above that and we’re probably looking at $150.
Of course, it all depends on what other markets like DXY, TOTAL, and BTC decide to do over the coming days.