11/18 Third pump week or correction? Week's overview

3 giorni fa

Overview:
The post-election optimism is palpable, with markets expecting a business-oriented administration focused on cutting spending and reinvesting in the domestic economy. This sentiment aligns with key developments across markets:

Yields and Rate Cuts: Treasury yields are stalling, signaling a potential reversal following the Fed’s 75 basis point rate cut. If yields resume climbing, it could suggest market skepticism toward further cuts, hinting at expectations of stable or tighter conditions ahead.

Dollar Index and Macro Environment: The rising dollar index reflects the upward pressure on rates but also hints at a weakening macro environment in Europe since the index is calculated against the euro.

Gold's Decline: Gold has slid for two consecutive weeks, correcting 7% from its recent high. This drop could indicate stronger economic conditions boosting risk-on sentiment, or tighter monetary policy driving risk-off pressure. A stronger dollar further pressures gold downward, while a weaker dollar typically provides support.

CPI and Job Market:The Fed reported a year-over-year CPI increase to 2.6%, in line with expectations but up from 2.4% in the previous month. This marks the first uptick since April 2024. Meanwhile, unemployment has dropped for three straight months, now at 4.1%, below pre-pandemic levels.

CME Tool Insights:The CME tool indicates a 38.1% chance of no rate cut at the December 18th meeting. This aligns with a strong labor market and recent comments by Jerome Powell stating, “The economy is not sending any signals that we need to be in a hurry to lower rates.”

Institutional Bitcoin Investments:Institutional investors ramped up Bitcoin ETF purchases for the second week post-election. Despite retail-oriented funds like Fidelity and ARK selling on Thursday and Friday, BlackRock’s buying continued to dominate. Last week also marked the highest Ethereum ETF buying activity to date.

Market Indices: SPX retraced to its 0.68 Fibonacci level after the election, setting up for a potential climb higher.
QQQ mirrored the SP500, maintaining its retracement pattern.

BTC TA:
W: The past two weeks produced strong vector candles with rising volume, though still below the peaks of February-March 2024 and the bull runs of 2017 and 2021. While a correction is overdue, BTC may stay range-bound briefly or push toward the psychological 100k level as early as this week.

D: Bitcoin is in a parabolic phase, with no divergences or clear technical patterns—simply pumping higher.

4h: A small MACD divergence cleared over the weekend, and RSI normalized from overbought levels. Notable bullish CVD absorption occurred midweek, where selling pressure formed lower lows on the indicator, but buying pressure resulted in higher lows in price.

1h: No divergences detected, and BTC remains on track toward 100k.

Alts Relative to BTC:
The only altcoin keeping pace with Bitcoin is Solana, bolstered by its ecosystem of memecoins. However, unexpected contenders like XRP and ADA have entered the spotlight, pumping unexpectedly last week. Who’s behind this? It’s unlikely the DeFi crowd. Could it be that, six years later, people have forgotten Ripple’s controversies and Cardano’s slow progress?

Bull Case:
This is just the beginning of a major 2025 crypto cycle. With regulatory hurdles and quantitative tightening behind us, the path forward is clear for a prolonged bull market.

Bear Case:
With Bitcoin at all-time highs, this could mark the peak and final leg of the 2024 crypto bull run.

Fear and Greed Index:
At 83, we’re deep into extreme greed territory—a classic danger zone. Historically, extreme greed rarely ends well, and this is an official selling zone for a prudent investor. But you aren't one of them, are you?