The Post-Halving We Didn't Expect

Uncharted Lite 24

“Risks come from not knowing what you’re doing.” - Warren Buffet

• BTC’s price movement continues to lack clear direction, oscillating without strong momentum in either way. The 50-day EMA offers significant technical support, and there's even stronger support at the $60k level. Currently, BTC is relatively stagnant as it tries to establish a longer-term trend, with the recent 92% rally in six weeks causing the need for a period of consolidation.

• While the $60k level will be crucial for support, any breach could lead to a rapid drop towards the $52k level. This area previously acted as both support and resistance, indicating its importance. On the upside, if BTC can break above $67k, there is potential to reach the top of the range near $74k.

Figure 1: State of the System distinguishes between bullish and bearish regimes and transitions depending on bitcoin’s performance.

• The Federal Reserve's financial stability report shows that a record series of interest rate hikes has not overstressed the banking system or caused a recession, suggesting the economy has remained resilient despite the tight monetary policy.

• The Fed is now caught between ensuring continued economic growth and controlling inflation. While growth data indicates the potential for easing monetary policy, persistent inflation concerns may necessitate further policy adjustments to achieve the desired inflation rate.

Figure 2: US economic growth based on monetary policies.

• On the daily chart, BTC’s price remains within the range of $60k to $70k, showing difficulty in breaking through either side. The Relative Strength Index is close to 50%, indicating a balance in market momentum. The current drop towards the $60k support level could potentially lead to a significant breakdown and a drop to the $52k area.

• Conversely, if BTC breaks above $70k, a new all-time high would be on the horizon. There will be a lot of volatility, and we will have have to pay very close attention to the position sizing. But right now, really can’t short this market because of the ability for it to just suddenly rip to the upside.

Figure 3: BTC price, CVD, OI and average predicted funding rate.