Risks to Crypto, Charting Interest Rates & Stocks | Navigator

Review Date: April 14th, 2022 |

BTC Daily Chart

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

Looking at the big picture in BTC, I see the following. A clear B-wave of an A-B-C correction ended at the neckline of the Head and Shoulders top near 47k. 47k was also the 38% retracement of the November down move. If there is a decline below 41.5, the C-wave could start down.

This is still the operative formation for crypto. Meaning there is still a risk of a down move. The Bill William Awesome Oscillator has turned negative for BTC, confirming the idea that there is downside risk. If BTC were to rip up above 47k, that would invalidate the bearish formation.

Total 2 Daily Chart

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

There is also a key chart in Total Crypto Market Cap Excluding Bitcoin (TOTAL2). TOTAL 2 has met resistance at a key Fibonacci speed resistance fan line near $1.09 trillion. The Williams Awesome Oscillator also hints at a possible down move.

BTC Weekly Chart

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

DeMark’s Elliot Wave read is negative for BTC from multiple angles. One read is that there could be a “C-wave” down to complete an A-B-C correction of 2020-2021 up move. This chart also shows that $42,500 is an import resistance to consider.

ETH 4-hour Chart

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

On the ETH 4-hour chart, the ETH rally stopped at resistance at the April 6 low. This, along with DeMar 9 top, hints that sellers are still active on rallies.

BTC 4-hour Chart

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

Looking at the 4-hour chart of bitcoin, a move below $40,500 would hint that sellers were active during the last rally. If BTC is above $40,500, the crypto market might remain stable.

Bitcoin Dominance (BTC.D) Daily

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

If Bitcoin Dominance (BTC.D) continues to find support at 41.5%, then there is a chance that bitcoin is a “safer” investment than most altcoins.

Bottom Line: Don’t get caught long if BTC takes out 41.5k. If BTC is below 41.5k, BTC can take TOTAL2 and ETH down. Tactical charts still show bigger players may be selling rallies. At best, crypto can stay in a range. At worst, crypto could be impacted by a decline in equities and a continued rise in long-term interest rates in the U.S. and Europe.

Charting Interest Rates and Stocks

_{Data as of 04/14/2022 – Past performance not indicative of future returns}

Recently, the market has been focused on Fed rate hikes and how that impacts yields on short-term bonds like the 2-year note and 5-year. We believe the focus could shift to a rise in long-term rates as the rate on the U.S. 30-year bond. The Fed has been too slow in addressing inflation. As a result, long-term rates (US30Y) may rise. US30Y is above resistance at 2.73% and could move to 3.75%. If such a move were to unfold, US30Y would return to levels last seen during the crypto bear market in 2018.

Bottom Line: It is very likely that U.S. long-term interest rates will continue to rise. BTC and ETH charts show that crypto investors may be worried about rising rates. Crypto investors may also be concerned about a decline in stocks. To us, these concerns have merit. If there is a drop in stocks, we believe crypto could decline but quickly bounce back. It seems prudent to use rallies to reduce risk in altcoins you no longer believe in and have stablecoins available that you can deploy if there is a large decline.