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Issue 367 – Trading the Crypto Pullback

January 18, 2023


Risk markets are pulling back today after lower-than-forecast PPI numbers.

That may sound strange until you consider that several markets were up considerably going into the inflation data, especially Bitcoin.

In today’s video, I discuss my plan for trading today’s pullback, including where I think the crypto market is heading this quarter.

Updates include DXY, SPX, BTC, and ETH.


US Dollar Index (DXY)

Support: 101.30 and 99.30

Resistance: 103.50 and 105.60

Idea: DXY bounced following Wednesday’s PPI numbers, which were actually quite bullish for risk assets. But I think markets got ahead of themselves, so a lot of that bullishness was already priced in. DXY faces a big hurdle at 103.50, and the same can be said about support at 101.30. So for now, we’re dealing with a range-bound market between those two levels.

S&P 500 (SPX500)

Support: 3,910 and 3,780

Resistance: 4,000 and 4,140

Idea: SPX pulled back today from the all-time high trend line near 4,010. That’s an area I’ve mentioned nearly every day this month. However, SPX is fast approaching 3,910, which has been a pivot for the market for months. So a bounce from there is likely, but a daily close below that would open up the March 2020 channel support near 3,780. My gut tells me we eventually see the SPX break above its all-time high trend line, but probably not without a further pullback or at least more consolidation.

Bitcoin (BTCUSDT)

Support: $20,000

Resistance: $21,500 and $23,000

Idea: BTC broke below the channel I mentioned recently and gave us a nice retest of that level as new resistance. Bitcoin needs to cool off a little after a 28% gain in just 18 days. Key support for BTC is $20,000, although we might see a dip below that area before the uptrend resumes. I like Bitcoin higher toward $25,000 and potentially $29,000, but not without a pullback into the $20,000 region first.

Ethereum (ETHUSD)

Support: $1,500 and $1,420

Resistance: $1,570

Idea: ETH is pulling back today after closing below the channel I mentioned yesterday. We even got a retest of that $1,570 area as new resistance before the pullback. For now, $1,500 support is holding. But a daily close below that would open up the $1,420 region. I’m still short-term bullish on ETHUSD, but we probably need a few days to pull back/consolidate first.

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Justin T 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.