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FameEX Daily Technical Analysis | Goldman Sachs Predicts the Fed Will Not Raise Rates This Week, Given the Pressure of the Banking System

2023-03-21 15:46:15

Yesterday, most of the major cryptos exhibited price depreciation with fluctuations between -4.65% and 0.90%. With the strongest trend, SOL was one of the few cryptos to hold up on the market, rising 0.90%. Conversely, DOT was the weakest, sharply down -4.65%. BTC and ETH, two of the leading cryptocurrencies, climbed 0.58% and fell -1.34%, respectively.

According to the 4-hour trading cycle depicted below, as the price rose more than 40% from the bottom, the long market called a truce. Thus, the trend has entered a consolidation phase. From the perspective of SMAs, a long trend was displayed, indicating that the short-, medium-, and long-term trends are still in the hands of the long. However, the trend of the MA7 support has moved sideways, not as steep as before, and concerns remain regarding excessive price surge in the short term. Thus, it is recommended to pay attention to the risk when adding long orders.

Overall, the market is favorable to the long trend. Therefore, it is recommended to hold long positions at present, and enter into further orders when the price has a pullback but above the low point.

Source: TradingView

During yesterday's trading session, all three major U.S. stock indexes climbed. The Dow Jones index, with the strongest strength, gained 1.20%. The S&P 500 index also rose 0.89%. The Nasdaq index was relatively weak, edging up 0.39%. Meanwhile, two of the leading cryptos, BTC and ETH, rose 0.58% and fell -1.34%, respectively.

As to political and economic fields, On the eve of the Federal Open Market Committee (FOMC) meeting, Goldman Sachs said Monday that there would be no chance of a rate hike by the Federal Reserve (Fed) this week because of pressures in the banking system. However, William Dudley, former chief executive officer of the Federal Reserve Bank of New York, said in an interview Monday that he expected the Fed's quantitative tightening (QT) to continue despite that many problems suddenly hit the banking sector.

According to the CME's FedWatch tool, traders expect odds of over 75% on the Fed raising rates by 0.25% and of nearly 25% on not raising rates.

Last Sunday (March 19th), UBS, the largest Swiss bank, agreed to buy 167-year-old Credit Suisse for $3.26 billion after the Swiss National Bank (SNB) brokered a deal. As a result, Credit Suisse's additional tier-1 (AT1) bonds worth $17.3 billion completely became write-down assets, being of no value.

To avoid further financial turmoil in the world, six major central banks, including the Fed, Canada, the United Kingdom, Japan, and Europe, announced that they would increase the frequency of dollar exchange operations from Monday, increasing the frequency of offering dollar transactions from weekly to daily to enhance dollar liquidity.

Source: Yahoo! finance

Over the past 24 hours, there has been a total of $46.92 million in long liquidations and $109.895 million in short liquidations, resulting in a net short liquidation of  $62.975 million. In general, the change in the total amount of liquidations was not significant, and investors returned to a rational investment.

The Fear & Greed index has greatly increased to 66, over the significant threshold of 50, and hit a new high since November 2021 in a row. This suggests that the market has become optimistic.

The Bitcoin Ahr999 index has increased to 0.81, which is above the support level of 0.45 but below that of 1.2. This shows that the short-term trend becomes strong, but the long-term trend is still a bear market. Therefore, It is not recommended to buy the dip in batches. However, purchasing small amounts through dollar-cost averaging (DCA) may be a viable strategy. 

According to the above analysis, the market has become optimistic with a stable price trend. Therefore, we recommend periodically buying with a fixed amount and selling them gradually as the market rises.

Source: Coinglass

Disclaimer: FameEX makes no representations on the accuracy or suitability of any official statements made by the exchange regarding the data in this area or any related financial advice.

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