01/18 - Macro for Humans
Market Overview
Headline
Bitcoin Nears $100K as Stock Market Rally Continues
Summary
Bitcoin is approaching the $100,000 milestone amidst a strong stock market and a short-term dollar rebound. Interest rates are ticking up, creating a complex environment for crypto traders.
Mood
The market feels like a party that's in full swing, but everyone's keeping an eye on the clock, wondering how long it can last.
What Changed Recently
Bitcoin's surge has accelerated, gaining nearly 4% in the past week. The dollar has shown surprising strength, potentially complicating the crypto rally.
Comparative Market Analysis
Vs 7 Days Ago
Stocks
The S&P 500 is up 1.17% over two weeks, maintaining its uptrend. This risk-on sentiment is providing a supportive backdrop for crypto, especially Bitcoin.
Dollar
The dollar has strengthened in the short term, which typically pressures crypto. However, Bitcoin's resilience suggests strong underlying demand.
Interest Rates
The 10-year yield has jumped 15 basis points in a week, signaling changing rate expectations. This could create headwinds for both stocks and crypto if the trend continues.
Bitcoin Dominance
Bitcoin dominance has remained relatively stable around 59.56%, indicating a balanced market between Bitcoin and altcoins.
Vs 14 Days Ago
Stocks
The stock market's steady climb over the past two weeks has created a favorable environment for risk assets, including crypto.
Dollar
Despite the dollar's recent strength, it remains in a longer-term downtrend. This broader weakness has been supportive of Bitcoin's rise.
Interest Rates
The uptick in yields over the past two weeks suggests a shift in the interest rate outlook, which could impact crypto if it leads to broader risk-off sentiment.
Bitcoin Dominance
Bitcoin's market share has held steady over the past two weeks, indicating no major rotation between Bitcoin and altcoins.
Crypto Specific Trends
Current State
Bitcoin Vs Alts
Money is flowing into both Bitcoin and altcoins fairly evenly, as evidenced by the stable Bitcoin dominance. This suggests broad-based crypto market strength.
Hot Sectors
With Bitcoin nearing $100K, there's growing interest in 'blue chip' cryptocurrencies and projects with strong fundamentals.
Volume And Activity
Trading volume is below average, indicating cautious optimism rather than FOMO-driven buying.
Key Shifts
Week Over Week
Bitcoin's momentum has accelerated, gaining nearly 4% in the past week compared to the previous week's gains.
Two Week Trend
Over the past 14 days, we've seen a steady uptrend in both crypto and traditional markets, with few significant pullbacks.
Notable Reversals
The dollar's short-term strength is a potential reversal to watch, as it could impact crypto if sustained.
What This Means For Traders
If Youre Bullish
- Look for breakouts above the $97,500 resistance level in Bitcoin
- Wait for high-volume moves to confirm genuine breakouts
- Consider trailing stops to protect gains as we approach the psychologically important $100K level
If Youre Bearish
- Watch for failures at the $97,500 resistance level
- Look for divergences between price and RSI as we approach $100K
- Be prepared to quickly close shorts if Bitcoin breaks decisively above $100K
If Youre Uncertain
- Consider using options strategies to benefit from increased volatility near $100K
- Watch the $90,000 support level in Bitcoin for signs of weakness
- Monitor the relationship between Bitcoin and the dollar index for clearer directional cues
Evolving Trading Guidance
What Changed
From 7d Ago
The market has shifted from cautious optimism to a more decisive uptrend, favoring momentum-based strategies over range-bound trading.
From 14d Ago
Two weeks ago, the focus was on accumulation. Now, we're seeing a transition to breakout trading as key levels are tested.
Current Best Opportunities
Look for high-probability breakouts in Bitcoin and major altcoins, especially those retesting previous resistance levels as support.
Approaches To Avoid
Avoid aggressive counter-trend trades or trying to call the top as momentum remains strong.
Timing Considerations
Short-term traders can be more active now, but consider taking profits as we approach major psychological levels like $100K in Bitcoin.
Key Levels To Watch
Critical Thresholds
Bitcoin at $100,000 and S&P 500 at $7,000 are the key psychological levels to watch
Recent Breakouts
Bitcoin breaking above $95,000 signals strong bullish momentum
Approaching Tests
Watch for how Bitcoin reacts to the $97,500 resistance and whether the S&P 500 can break $7,000
Final Advice
Main Takeaway
Stay alert but optimistic as Bitcoin approaches $100K, and be ready to adapt if the dollar's strength impacts the crypto rally.
Biggest Change
The acceleration of Bitcoin's uptrend combined with rising yields creates a more complex trading environment than two weeks ago.
Risk Reminder
As we approach major milestones, volatility often increases. Make sure your position sizes account for potentially wild swings in both directions.