02/17/23 BTC/USD Analysis – (Un)surprising Rejection, End of Euphoria?

I wanted to leave Bitcoin alone today. However, Bitcoin last night did exactly what I warned against on yesterday’s stream. That is why it is good to pay attention to the market at the end of the trading week. That is, to let my readers know what actually happened at the end of yesterday.

The markets are starting to realize their mistake

First we will start with something very important and that is the expectations of the markets. According to Fed Watch, markets are fully aware that that interest rates will continue to rise. The spoken words from the mouths of individual FOMC members also help a lot. Some of them open up the option of a possible hardening in the form of a larger hiku. Specifically by 0.5 percentage points. I see this as some reaction to the latest data on inflation and retail sales. Inflation is no longer falling at such a pace as it was several months in a row before. And demand is still strong in the United States.

The June contracts more or less calculate that we will go above 5% from the current 4.75%. And with a high probability we will go up to 5,5 %. Which corresponds to the terminal rate from December. In short, it must be understood that the Fed can tighten much more than the markets previously assumed. We can easily get up to 6%. What does this mean for us? Rates approaching 6%, for sure they are not prescribed in the courses at all. By that I mean bitcoin rate and stock rates. So don’t fall into any FOMO.

The Bitcoin rate was rejected at a key resistance yesterday

After Wednesday’s pump, the bulls immediately celebrated and a certain FOMO could be felt from the market. And indeed, the chart looked very good at first glance. But I warned that Thursday’s close form is key. And that there may still be a rejection in the end, which confirms the band around USD 25,000 as resistance. The resistance that won’t let the bitcoin rate go higher.

And that just happened. The Thursday candle has no debates negative form and volumes are the largest on Binance since November last year. You could also see from the weekly chart that something was wrong. I explained this in quite some detail last night on stream. To put it mildly, the bulls found resistance again beating. And that’s why I personally don’t like the daily chart at all. As it is a confirmation that is a very strong offer in the area of ​​the mentioned band.

You’re probably asking, what now? That depends on how long the euphoria will last. Of course, one rejection does not immediately mean that the course turns downwards. But it is wise to give the signal enough weight. The weight it certainly deserves. And I attach great importance to that signal. Because we know from the summer that Bitcoin simply has a big problem with this band. And one pump from the $21,500 S/R level doesn’t change that much. Just don’t get drunk on the roll.

But in order not to see it unnecessarily too negatively, the weekly close is decisive. When the weekly candle closes above the current resistance, the hell take the Thursday candle. By the way, the weekly candle doesn’t look very good. A longer upper wick with a peak in the middle is formed on it resistant confluence.

In conclusion

I know it’s hard, but it’s good to stay grounded. The situation is not absolutely favorable from a wider perspective. You can certainly trade those growth waves. But the longer-term prism is a considerable risk that a crash will come. My concern is that the Fed will push interest rates up until there is a problem. Because they are probably starting to realize that there are still enough savings in the economy from the turn of 2020/2021, when people in the US received all kinds of free money. They are probably determined to break it, but naturally they won’t say it outright.