SVET Reports
SVET Market Update (12 June 2022)
During the past week BTC was devalued for more than 15% (from 32k to 27k) by traders playing on a number of factors, including, worsening macroeconomic climate (CPI report showed the 1% monthly increase) and technical indicators, which showed that the majority of players started to reverse their mildly short-term bullish stance and opened new short positions. Additionally, there were very a notable change in the crypto-media messaging, which become overwhelmingly bearish.
Among other things, that is reflected in the ‘fear and greed’ indicator which stays below 15 for several weeks already. Also, all Twitter polls conducted by crypto-influencers, I have seen so far, show that price expectations have sharply turned south among traders during past 7–10 days. Naturally, that rises the question ‘Are we bottoming, yet?’.
Not so fast.
BTC price actions during the past 24 hours have showed that traders stay divided in their short-term price actions assessments.
Yesterday at about 9.00 AM CST, soon after the Chinese session kicked in, BTC was crashed by Asian bears to its lowest-standing strong resistance level at 27.5k, after which the road will be wide open to BTC reaching 20k (with the next doomsday train station named ‘12k’, looming in the dark at desperate crypto-market participants).
However, at about 10.00 AM EST when Sunday’s lights lazily went on the other side of the globe, several big-purses USA players, energized by a good-night-sleep, took the other side of the Chinese trade leading to BTC exploding to 28.4k in a matter of minutes on a record (in weekly terms) volumes.
That rampage of bullishness lasted for only about two hours, after which those few adventures traders, which printed that long green candle on a hourly graph, realized that USA millenials are not rushing to bring more money into their pockets, so they decided to close their long positions as abruptly as they opened it (objectively we might call this type of behavior - ‘stop-loss fishing’).
Now we are back to testing that doomsday 27.5k level, breaching which will most likely send a new panic wave roaming through our small crypto-pond.
All those event clearly indicate that the overall situation on the market might be assessed as ‘uncertain’, with halve of traders reading themselves to aggressively open medium-term short positions, while another halve starts to see a good opportunity for a counter-trade, which might bring BTC back to its early May levels of 40k.
That is not a coincidence, as this week promises to be the important short-term trend definer.
First, of course, is this infamous FED-Boomers lunch followed by the ‘conference’ scheduled to take place June 15, Wednesday at 1.30 PM EST. Market expectations converge on that the rate will be hiked another 0.5% to 1.5%.
That sit-down of unelected elders will be immediately preceded by The U.S. Census Bureau publishing its Retail Sale report at 7.30 AM EST. Their previous report showed USA consumers continue to increase their consumption (measured on a monthly basis) by another 0.9% in April. Expectations are that the May report will show a very significant (3x) decrease in a consumption rate (to 0.2% — 0.3%).
Almost halve (46.5%) of RS index consists of four major categories — car sales (‘Motor vehicle & parts dealers’), food (‘Food & beverage stores’), households (‘General merchandise stores’) and gas (‘Gasoline stations’). Consequently, where this index lands is supposed to have a major impact on FED-Boomers mood at this day.
Wait, there’s more. Tuesday June 14 at 7:30 AM EST US Bureau of Labor Statistics (BLS) issues Producer Price Index (PPI). Although, they say, PPI has a lesser impact than CPI on the FED’s hypocritical ‘decision making process’, this indicator is still played by traders, which firmly believe in ‘FED rationals’ except purely personal political careers orientated ones, standing behind all of ‘Chairman’s public moves.
In April PPI report showed a sudden drop to 0.5% (compare to 1.5% in March). May’s PPI is expected to get back in track with FED inflationary expectations, rising to 0.7% — 0.8%.
Also, at the Thursday, June 16 morning (7:30 AM EST) United States Census Bureau will bring us the May Housing Starts report.
As a result of overblown incomes-expectations Americans pedaled their appetite for new homes to 1,706 million units back in November 2021 (compared to 1,560 million in October). The following six months haven’t showed any significant reduction of public demand for new homes (highest number being 1,777 million in February and lowest — 1,666 million in January). May’s forecast stands at 1.7–1.69 million (April showed 1,724 millions).
Although the Housing Starts (as well as the Building Permits, serving as a leading indicator for new housing, which will be published by the same Bureau at the same time) won’t budge the FED rotten moral compass needle at all, it is also watched by wall-street players.
Having that statistic unexpectedly showing a spike in the demand for new homes (unlikely) might compel traders to short NASDAQ more aggressively in an anticipation of negative media reaction to this news and, then, to retail investors abusing their sell buttons, again.
Friday, June 17 at 7:45 AM this week culminates by ‘Chairman’ posing in front of cameras and trying to look as though he really thinks that this world will be better off if all economic activities are regularly suppressed in it by several, randomly appearing/disappearing guys with an access to the absolutely unchecked (in fact, totalitarian) power.