From Rektember to a Brighter October
U.S. 10-year Note Yield: Daily
The shocking post-merge-down trade in crypto is driven by macro factors like a higher dollar and rising interest rates. We expected inflation to be old news, but that was not the case in September. U.S. 10-year note yields could reach as high as 3.69% before the interest rate panic ends.
S&P Futures: Daily
The problem with crypto started when stocks started to fall apart last week. The downside target in S&P (ES1) is 3726.
PAX Gold: Daily Chart
The Dollar (DXY) and U.S. interest rates may enter a blowoff top phase. This setup could mean an emotional run-up in DXY to 112 and a down move in Gold. If Gold continues to break down, it is worth looking at Pax Gold (PAXG) at 1610.
The talk in crypto is centered on the SEC coming after all proof of stake coins. This development, combined with a confirmed head and shoulders top in ETH, has people talking about a move to the head and shoulders top target of $800.
Hidden pivot analysis in bitcoin points to the possibility of a new low for 2022 at $16,000. BTC would have to stay below $19,800 for this chart structure to be valid.
Token Metrics Moving Average Indicator
From a technical analysis point of view, the crypto market failed to rally because most big cap coins could not get above their 60-day exponential moving average. The 60-day EMA is an important indicator highlighted in a statistical study by the Token Metrics quant department.
The post-merge decline has been a humbling experience. That says when the Fed fear trade has run its course headed into the Fall equinox on September 22. While the market is talking about chart points like $800 ETH and $16,000, those targets may not be attainable. There is “good” news about the post-merge decline. Gann’s seasonal work has changed. Pre-merge, that work showed a positive September followed by declines in October and November. Now, the pattern has changed. A negative September could set up a real bottom in crypto and a substantial upside during October and November.