A state of uncertainty prevails in the crypto market. Will prices go down or up? Bulls and bears can both produce evidence to support their thesis. It's been 22 months since the bear market started. We must be nearing the end now.
On the other hand, central banks continue to increase interest rates. Bond yields are rising, and the decline in inflation has slowed. The dollar is getting stronger, which means risk appetite is low. On the other hand, we see signs of strengthening in the crypto market.
Is the primary trend up? Focusing on supply and demand rather than rhetoric can help us clarify our minds. Are we above the 200-day simple average? The chart below shows that the crypto total market cap is below the 200-day average.
So what does the weekly RSI, which measures momentum, say? We went above the critical 50 level on Sunday night. However, as of now, we are below the 50 level again.
Critical indicators point out that the market is on a knife edge. Currently, the outlook is negative, but the situation may change at any time.
Bitcoin and Ethereum
Bitcoin and Ethereum have performed better than other coins this year. Can we say positive things about these leading coins?
Bitcoin, which fell below its 200-day average on August 17, has yet to rise above the 200-day average. It attempted to surpass the 200-day average twice but encountered resistance both times.
Bitcoin is above 50 on the weekly RSI chart. It shows that Bitcoin is showing signs of strengthening.
Ethereum price also fell below its 200-day average on August 17. Afterward, it could not even come close to its 200-day average. The weekly Ethereum RSI value is still below 50. Therefore, we cannot talk about an upward trend for Ethereum.
Macroeconomic Trends
The confusion is not unique to crypto. There is also a mixed outlook in stock markets. The Nasdaq 100 rose from March to July. Nowadays, we see lower highs and lower lows on the Nasdaq 100 chart. It indicates that technology stocks are in a downward trend. A similar situation exists in the S&P 500.
The arm wrestling between the market and the FED continues. The American business world does not want to put on the brakes, and the FED is trying to reduce asset prices and cool the economy with interest rate increases and verbal guidance. Meanwhile, inflation in the world is decreasing slightly. I wonder about the US's September inflation.
TL;DR
Major technical indicators show that the primary trend in the crypto market is downwards. On the other hand, it has been a long time since the bear market started, and prices have reached attractive levels. High interest rates eventually discouraged even a permanent bull like me. It makes more sense to be willing to pay 10%-20% more and open a new position when momentum builds in the market. A final downward movement for altcoins is still on the agenda, and an upside move wouldn't surprise me. Because we are in the month of "Uptober."
The best strategy for now seems to be to wait and see.
Thank you for reading.
