07/15 - Macro for Humans
Market Overview
Headline
Bitcoin Surges Past $120K as Stock Market Rally Continues
Summary
Bitcoin is pushing new highs amidst a broader risk-on sentiment in global markets. The S&P 500 is also rallying, while Treasury yields climb, suggesting a complex interplay of economic optimism and inflation concerns.
Mood
The market feels like a party that's in full swing, but some guests are starting to wonder how long the music will keep playing.
What Changed Recently
Bitcoin broke through the psychologically important $120,000 level, while the US dollar showed signs of stabilizing after recent weakness.
Comparative Market Analysis
Vs 7 Days Ago
Stocks
The S&P 500 has continued its upward march, gaining nearly 2% in two weeks. This risk-on sentiment is providing a supportive backdrop for crypto, especially Bitcoin.
Dollar
The US dollar has found some footing after recent declines, potentially creating headwinds for crypto if this strengthening continues.
Interest Rates
Treasury yields have climbed, reflecting expectations of higher interest rates. This could eventually pressure crypto if it leads to tighter financial conditions.
Bitcoin Dominance
Bitcoin dominance has pulled back slightly but remains high at 64.52%, suggesting money is still favoring BTC over altcoins.
Vs 14 Days Ago
Stocks
The stock market's two-week rally has reinforced a risk-on environment, providing a strong tailwind for crypto prices.
Dollar
The dollar's stabilization over the past two weeks marks a potential inflection point. If it gains strength, it could challenge crypto's recent momentum.
Interest Rates
The upward trend in yields over the past two weeks signals growing expectations of economic strength, but also potential inflation concerns.
Bitcoin Dominance
Bitcoin's market share has remained relatively stable over two weeks, indicating sustained interest in BTC relative to altcoins.
Crypto Specific Trends
Current State
Bitcoin Vs Alts
Money is clearly favoring Bitcoin right now. It's like everyone wants to ride the biggest, most stable ship in a sea of uncertainty.
Hot Sectors
Large-cap cryptocurrencies, especially Bitcoin, are seeing the most interest as traders seek established names in this bullish environment.
Volume And Activity
Decreasing volume coupled with rising prices suggests steady accumulation rather than FOMO-driven buying. It's like a slow, controlled burn rather than an explosion.
Key Shifts
Week Over Week
Bitcoin has broken above key psychological resistance at $120,000, potentially opening the door for further gains.
Two Week Trend
The past two weeks have seen a continuation of Bitcoin's dominance, with altcoins struggling to keep pace.
Notable Reversals
The US dollar's potential bottoming could mark an important shift if it continues, potentially challenging crypto's recent strength.
What This Means For Traders
If Youre Bullish
- Look for pullbacks to major moving averages as potential entry points for Bitcoin longs
- Wait for a daily close above $120,000 to confirm the breakout before adding to positions
- Consider trailing stops to protect gains while allowing for further upside
If Youre Bearish
- Focus on overbought conditions in Bitcoin for potential short-term reversals
- Watch for divergences between price and RSI as potential short entry signals
- Be prepared to close shorts quickly if Bitcoin shows continued strength above $120,000
If Youre Uncertain
- Consider a barbell strategy: hold some Bitcoin for upside exposure while keeping cash ready for potential dips
- Watch the $120,000 level closely – a failure to hold above could signal a short-term top
- Monitor the US dollar index – sustained strength could indicate a shift in market dynamics
Evolving Trading Guidance
What Changed
From 7d Ago
A week ago, we were anticipating the $120,000 test. Now, we're looking for confirmation of the breakout and watching for potential consolidation.
From 14d Ago
Two weeks ago, altcoin opportunities looked more promising. Now, Bitcoin's dominance suggests a more BTC-focused approach is prudent.
Current Best Opportunities
Look for high-probability setups in Bitcoin, especially on pullbacks to key moving averages. For altcoins, focus on those with strong correlation to BTC.
Approaches To Avoid
Avoid chasing breakouts in lower-cap altcoins, as they may underperform in this Bitcoin-dominated market.
Timing Considerations
Intraday trading may be challenging due to decreased volume. Consider longer timeframes and swing trading approaches.
Key Levels To Watch
Critical Thresholds
Bitcoin: $120,000 (psychological resistance turned support), S&P 500: $6,300 (key resistance)
Recent Breakouts
Bitcoin breaking above $120,000, US 10-Year Treasury Yield above 4.4%
Approaching Tests
S&P 500 nearing $6,300, Bitcoin testing the sustainability of its move above $120,000
Final Advice
Main Takeaway
Stay focused on Bitcoin for now, but be prepared for potential consolidation or a shift in market dynamics.
Biggest Change
The breakout above $120,000 in Bitcoin is the most significant development, potentially opening the door for further gains.
Risk Reminder
Remember, markets that move up quickly can correct sharply. Don't let FOMO drive your decisions – stick to your risk management plan.