Market Report
Jan 2023
Macroeconomics events
The first month of the new year was fairly positive for investors as the markets took a break from losses, helping both small investors whose portfolios had been declining for almost a year now and those who never stopped buying more in the first place, such as Cathie Wood and ARK Innovation. Thanks to SEC representatives and their cryptic tone once again, which left some room for room for interpretation and various speculations and provided the market with a tailwind this month.
So far we can only guess what is the final destination of this inflation handling journey, but at some point J. Powell has to show us more of his cards. The showdown might happen sooner than we expect given how close the markets are to their key resistance levels right now.
Key economic data this month:
So far we can only guess what is the final destination of this inflation handling journey, but at some point J. Powell has to show us more of his cards. The showdown might happen sooner than we expect given how close the markets are to their key resistance levels right now.
Key economic data this month:
Whether inflation peaked or not currently is still the hottest debate in the economic world.
The fact that unemployment is not going down despite Powell stating several times that it is necessary in order to cure inflation is not a good sign by any means.
Crypto market
Broad picture
After months of being relentlessly sold off and pinned down with volatility levels hitting All-time-low on Bitcoin and market participation close to zero, the crypto market has had enough and surprised everyone with a miraculous 40% rally that came out of nowhere.
There was no specific reason for investors to suddenly jump back into their Bitcoin positions all at once. It was just supply and demand laws that surprised us all once again when nobody was paying attention while crawling in fear.
There was no specific reason for investors to suddenly jump back into their Bitcoin positions all at once. It was just supply and demand laws that surprised us all once again when nobody was paying attention while crawling in fear.
Market structure
In January Bitcoin has thrusted upwards showing no regard of previously established strong resistance levels and is now sitting above key high timeframe supply areas at $18k and $20k with trading volume getting a very noticeable increase.
Technically this is a bull market. No matter how short-lived it might turn out to be due to the external factors.
Even though a necessary higher low print on high timeframes is still pending, the current strength of a trend is undeniable. As long as Bitcoin holds a $20k level as a support, you don’t want to stay in front of this train, but rather try to get yourself a ticket at the next stop.
Technically this is a bull market. No matter how short-lived it might turn out to be due to the external factors.
Even though a necessary higher low print on high timeframes is still pending, the current strength of a trend is undeniable. As long as Bitcoin holds a $20k level as a support, you don’t want to stay in front of this train, but rather try to get yourself a ticket at the next stop.
Sentiment
In our previous monthly report we insisted that no trend lasts forever, and this bear market is no exception. In January the apathy in the markets was replaced with cope and FOMO in a blink of an eye. In a week all kinds of investors went from "we will never have another growth period" to "this rally isn't real, just another manipulation.
One thing that stands out here is the fact that in terms of these indicators the market is still somewhere in between fear and greed despite seeing one of the most powerful rallies ever seen in just 3 weeks of time.
Featured technical tool - Relative strength index(RSI)
Relative strength index is a basic tool which gives you a more clear and obvious summary of the overall strength of a candlestick chart in front of you. RSI was one of a few things which, you could argue, could have foreseen the upcoming rise in crypto prices and Bitcoin in particular.
If the basic candlestick picture is not clear enough for you, you can take a look at RSI to get more ideas and insights.
If the basic candlestick picture is not clear enough for you, you can take a look at RSI to get more ideas and insights.
BitOK team commentary:
2023 kicked off with an extremely strong rally all over the crypto market leaving the vast majority of investors sidelined in disbelief - and that is totally fine. One of the ways to beat the market is to ride the wave and gather profits, another one is to remain cold and collected while missing out on an “obvious(in a hindsight) huge opportunity”.
Our team did not expect such a rapid change in tides, but we certainly welcome it.
Contrary to popular belief, it is now less risky to be on the long side of the market than it was in early January. Don’t lose your cool.
Our team did not expect such a rapid change in tides, but we certainly welcome it.
Contrary to popular belief, it is now less risky to be on the long side of the market than it was in early January. Don’t lose your cool.
“Better times have arrived quickly. How long they will last I don't know.
Use a hard invalidation in your trades, properly manage your risks and nothing will stop you from profiting big time until the next major trend shift. Be brave, but not crazy."
telegram: @DormantMind
Use a hard invalidation in your trades, properly manage your risks and nothing will stop you from profiting big time until the next major trend shift. Be brave, but not crazy."
telegram: @DormantMind
