Technical Analysis

This week, Peak Blockchain Consultants brings technical analysis into the blockchain knowledge base. This will provide more down-to-earth details on blockchain technology. The technical analysis is a bit different, as it is not just focused on the blockchain industry, but also the world at large. By understanding how blockchain technology can be used to improve various aspects of the world, we can create a more efficient and effective system overall.

• Market Overview: With the beginning of the new year, the market is now in a wait and watch situation. The market sentiments are now between bearish and neutral, and we usually see a consolidation in the stock indices during such a situation. Consumer spending has not diminished as it should have, and inflation needs to decline enough for the central banks to stop hiking the interest rates. In its meeting, the Fed mentioned reducing the pace of increasing the interest rates but will only stop it once the Personal Consumption Expenditure starts reducing.
• S&P 500 (SPX): The price is trying to take support at $3,820. Also, the price has been pushed down by the red line acting as resistance. The continuous selling pressure is there due to macroeconomic reasons. The 200 EMA in the weekly chart supports the price. This will be the last support, and if this breaks, then the price will fall further. The price will try to come at a pre covid high initially. It might take a few weeks to reach, but the chances of getting to that point have increased. If the price increases, $4,200 can be considered an upper limit.

• Bitcoin’s Price Action: Bitcoin is currently trading at around $16,800. The market is now moving in a range, but it might make a big move this month or next. We can make new lows if the support at $15,650 breaks. At the same time, there is also a chance for a bullish move that will take the price close to $20,000. While, for the whole year, we are in the bearish zone, the price can reach around the $20,000 –$30,000 range this year. If the price continues to hold above the orange line, we might witness a small bullish move in the daily timeframe.
• Bitcoin’s Dominance: The dominance of bitcoin will increase if the current market dynamics continue. Currently, 41% of the market share is held by bitcoin. This situation is likely to get better, and the dominance will rise. In such a situation, the prices of the altcoins will fall enormously. Also, two of the major competitors of bitcoin declined in 2022 by a considerable proportion, i.e., Luna and Solana. The market is currently being led by Bitcoin and Ethereum.

• Crude Oil: The price started declining quickly, and it was trading around $73.5 at the time of the preparation of this report. This price fall is mainly due to the recession fear and the news of covid. This is likely to continue to reduce the demand for crude. At the same time, the demand can rise due to the low availability of energy resources in European countries which may affect the price of crude oil. If the price sustains below $75, then the target price for the crude will be $60. It must be seen whether the gulf countries will reduce production to pump the price back or let the market forces play their role in ascertaining the costs.

• Bond Markets: Bond Markets are forward looking, functioning in advance and giving reliable indications of economic health. The bond yields are still inverted, continuing to hold their levels. The 2 Year bond yield is still running above 4% and will likely sustain those levels for some time. Although there is a bearish hammer in the monthly chart, the fact that the RSI is still above 80 is a bullish signal.The decline in the bond yields is what will signal the crash of the stock market and the rise of the bond market. Such impact was visible historically in the years 2000 and 2008.

• Gold & Silver: Gold and Silver have continued their streak to hold the prices and continue the accumulation. There is a slight chance that prices will dip a bit before taking the next bullish move to accumulate more at the lower levels. The price might decline briefly after the interest rate hikes. Huge volatility is possible after such announcements. While the chart of both metals looks bullish, a SIP can be done to create a perfect hedge against any adverse market situations.

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