Market Analysis 07/28/22

Financial markets in recent days have been decidedly erratic, and Bitcoin has been no exception.

In fact after upgrading Tuesday to local lows at $20,700, yesterday the leading cryptocurrency decisively reversed the trend reaching $23,460 and at the time of writing is trading at around $22,900.

Market capitalization $1.058 billion

BTC index dominance 41.8 percent

Stock markets closed a day of strong gains yesterday.

The S&P 500 up 2.62 percent and the NASDAQ up 4.06 percent.

Gold, silver, oil and gas also rose, while the dollar index fell to the 106-point area.

This morning Asian and European indexes opened on the heels of Wall Street, while S&P 500 futures are the slight decline.

The sudden positivity was driven by the actions of the Federal Reserve, which after raising Fed funds interest rates by 0.75 percent in the 2.25-2.5 percent annual range (in line with expectations) in the press conference chaired by Jerome Powell used decidedly conciliatory tones.

In essence, Powell said that inflation is too high and the Fed will continue to reduce the federal balance sheet, with the prospect of another significant interest rate increase at the next meeting if inflation continues to rise.

But two other statements caught Investors' attention: the first item of consideration is that, according to its Chairman, the Fed will firmly maintain a "data-oriented" approach (which means that in the event of a decided deterioration in economic parameters, it will return to loosening its monetary policy).

The second element of consideration is that the Fed sees no criticality in the country's economy, with a risk of recession.

In this regard we will soon have a decisive feedback, in fact today the U.S. GDP data will be published that will tell us whether the U.S. is in a technical recession or not.

The crypto market is in the wake with equities, Bitcoin has updated highs and is grappling with local resistance in the $23K area.

The altcoins have followed the main cryptocurrency and in some cases even outperformed, such as Ether, which broke above previous local highs and approached titanium resistance at $1,700

From a short-term perspective, Bitcoin must in turn be able to break above the July 20 highs from the resistance area in the $23800-24200 range.

In case of consolidation above that level, the most likely scenario is for an uptrend to target in the $27K region.

In case of price rejection, we remain in the short trading range with the upper limit at $23,800-24200 and the lower limit at $20500-21000.

Interesting news.

Ark Invest fund sold 1.4 million shares of Coinbase.

Perhaps Katie Wood (a big supporter of the crypto sector) has realized that it is better to buy Bitcoin, even in light of the SEC's recent investigation against Coinbase (which in my opinion will produce no outcome).

On the health front, WHO continues to raise alarms about the risk of spreading "monkeypox," and in this regard the Biden administration is considering declaring a public health emergency, 3 months before the midterm elections.

We talked about this here in the channel back in May, back in the day.

Finally, we end with the International Monetary Fund talking about a possible sharp decline in the cryptocurrency market and alleged stablecoin problems.

It arouses considerable hilarity that such statements come from one of the entities representing the current financial system, where there are countries struggling with 70 percent annual inflation.

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