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