BTC Sunday update:
2023 will be an interesting year due to the Interest Rates, inflation, unemployment rate, recession, potential rallies and market bottom
Some key context: Interest Rates follows the 2 Year Treasury Rate (US02Y), and US02Y marks the top of Interest Rates.
US02Y chart shows a potential top at 4.88% The current Interest Rates is at 4.5%
The next FED Interest Rate decision will be 1st Feb and I see 2 scenarios:
- US02Y ranges between 4.5%-4.2% until 1st Feb: 1 more 25bsp hike
- US02Y dumps to 4% by 1st Feb: No more hikes(unlikely)
I think we'll see one more hike of 0.25 bsp in February before finishing this hike cycle.
Maybe another 25bsp in March max depending on the data that will come out until then. But for now, I'd say February could be the last hike tbh.
FOMC Minutes on Wednesday will give us clues
Does that mean that once the hikes stop, the FED could pivot in the following Interest Rate decision?
No. Interest Rates can't go down until CPI is lower than Interest Rates.
The futures market expects CPI around 4.5% in May. If the Interest Rates are at 4.75%... they can pivot
So according to this analysis... FED Pivot will come in Q2 2023. Probably in May.
What does usually happen after the FED pivots? SPX dumps hard. And in principle, BTC will follow.
That's why I'm expecting a stock market and BTC bottom in Q3-Q4 2023.
Relief rally end of Q1?🤔
I hope all this info gave you context and an idea of what is likely to happen in 2023 (HTF).
This thread is probably making you feel like this, sorry😂
Now... what do we expect BTC to do this week?
The liquidations chart (7D TF) shows that the liquidity is to the upside. But if we compare it to last Sunday's data, there is less liquidity.
This is because retail hasn't traded much during Christmas-New Year and closed positions
Last Sunday's update vs current chart🔨
Projection is slowly playing out (due to low liquidity). I've been updating in previous posts my thoughts about this set up.
The new small arrows are potential entry points after filling wicks.
Caution on Wednesday (FOMC) & Friday (NFP).
This post is based on this twitter thread.