Analytics report
Nov 2022

In November the Fed has been doing what it does the best - trying to hold market participant’s hand in order to help them navigate throughout their sailing. Calming extreme fear, holding back euphoria and greed. All in all, doing “Fed things”.

One way or another, the month of November was relatively restful for the biggest markets and pretty much non-eventful for the Crypto market from a macro standpoint.

Key takeaways from the Fed meetings and speeches:

The first time in 2022 we’ve had a declining inflation print which sets up the market for a short term relief. If we get another less than expected inflation report in December, that might give a rise to trend shifting talks going into 2023.

Interestingly enough, the Fed chairs admittedly want to see an increasing number of US unemployment, because in their comprehension less employed people also means less spending. Which is a good thing during the fight with inflation.

Overall tone of the Fed and Jerome Powell remains slightly hawkish, and the signal they are relaying to us is very mixed at the moment. In either way, the biggest economy in the world having an inflation rate close to double digits is a particularly rare and complex problem which can’t and won’t be solved overnight. The road towards the desired rate cut target is long, and the final number is still up to a dispute.

Unlike smoothly sailing traditional markets, the crypto market has been through one of the harshest months in its entire history in November.

This month kicked off with a narrow uptick in price reflecting positive reaction to macro in equities, followed by a mind blowing top-3 derivatives exchange by trading volume in the world meltdown and insolvency. This utterly dramatic event is accompanied by a huge volume spike and extremely volatile decline of more than 25% in just under 3 days.

Needless to say that after such events Bitcoin’s market structure is still bearish to its limits. The trendlines we mentioned in our previous report show little to no reaction during the crash in november. Altogether, Bitcoin has escaped from an almost 150 days long consolidation area escorted by an enormous trading volume. This is as bearish as it can possibly get.

Right now we are looking at a new base for the price being built atop of an important support area of $16k which we also mentioned in our October report.

If the market is to continue its decline, the next important levels down below are $12k and $9k respectively.

This month is yet another deadly blow to already hanging on a straw market sentiment. However, unlike price, the sentiment during market crash events has fallen back to the levels established before the decline and not an inch lower. This tells us an average market participant is down to the point where he thinks he cannot be hurt any more, in the depths of apathy and indifference.