Ehi there Crypto and macro Twitter
Time for market analysis Number23!
"A talk on the macro: UR - MiCa - Week ahead"
I will explain here what happened since last week, and cover the crypto market starting from Technical Analysis, going into onchain BTC
First of all, if you want to have a deeper insight in what happened the week before, you should check my last weekly analysis
I'll put the link here for you:
But let's start digging into this week, should we?
So let's say that today talking about Bitcoin and where it is, where it's going and so on, isn't of any real help since we are still ranging in the same, well, range and nothing really happened to the markets this week with suisse and deutche banks making the news
I'm not going into the rumors about the collapse of this major banks:
1 - because they are rumors = no real data
2 - because I don't think anything like this will happen soon, but rather later this decade
3 - If they collapse, we are all screwed anyway, so why worrying before
I want to remember to everyone that a collapse through the banking system of any major bank or central bank is far more riskier and fast to spread out than that happened in the crypto market, if you remember that as well
Anyway, today I'm gonna let the chart apart since I already talked a lot about those here
And I'm gonna focus on the major catalysts of the week ahead, talking a little bit with you
This week we have the unemployment rate print coming out on friday that could move a little bit the expectations for the next rate hike on November 2nd FOMC meeting (and so bitcoin and equities as well)
The targets forecast by the markets are as of today splitted in half with just a little bit more probability of another 75bps hike in comparison to a dovish 50bps
I would like to see 75bps, but... we'll see
With an unemployment rate that is forecast to 3.7%, when the actual is 3.7% the market isn't expecting any move from the labor market, thinking it will remain strong against all odds and through one of the major crysis ever lived by the world in 40 to 60+ years
If the unemployment rate drops or anyway remains low the FED will take it as a sign that the labor market is strong enought to resist a 75bps hike once more
The opposite is also true where an higher thatn expected UR could bring the FED to move on a 50bps hike
That's not all of it tho on the macro side of things.
The MiCa bill (more than 1k pages) on the Europe side is coming to a final draft that will be passed in a few weeks
TLDR on MiCa:
Crypto companies or projects could gain 26state approval even if they get the approval on only 1 of the European countries
Regulation clarity in Europe
DeFi protocols (and NFTs issuers) would have to register with regulators
Seems like the MiCa will not take in consideration Cryptocurrency coins and so they will not be subject to this kind of regulation reading the page 40 of the document
ICOs must complete its dapps or blockchain in 1 year from the release of the whitepaper
Seems like transaction limits on stablecoins will only be applied to payments: so USDT and USDC can be used in DeFi with no limits
But probably at the end only EUR stablecoins will be whitelisted on these regulations
Will the MiCa help to fuel the next bullrun?
The week ahead:
1 - US ISM Manufacturing and Services, forecasted above 50 but we'll see
2 - OPEC+ Meeting: The much talked about meeting is upon us on Wednesday with expectations of a cut in production of between 0.5-1m barrels per day.
3 - ECB Minutes: Minutes from the September meeting are published on Thursday when the ECB hiked by 75bps and was accompanied by a hawkish statement and press conference. The minutes may offer clues as to if there were any dissenting views and also rate hikes for the future
4 - US NFP: The usual first Friday of the month brings the US payroll report with expectations for a slowing but still healthy 250k reading with the unemployment rate remaining at 3.7% with earnings steady at 0.3%.
Thus far the range in forecasts is between 175k-350k. If we hit 250k it would be the smallest rise in payrolls in almost 2 years although to put that in context that...
magnitude of print would be higher than the average monthly rise in payrolls in the 5 years prior to the pandemic and certainly would not be sufficient a drop to warrant any change in Fed policy.
5 - UK: The UK remains central to the global markets for all the wrong reasons and it will once again be the focus this week with the continued fallout from Kwarteng’s fiscal package. It is the Conservative party conference this week and he will be defending his fiscal package.
I don't know if you know it, but UK central banks is actually teaching the world how to QE while raising interest rates.
This is it for today.
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And they'll never be 🤓This post is based on this twitter thread.