Today was a critical day for the market. I think investors are still trying to figure out what all of this means. I see this playing out in 2 different ways, and both ways give a short-term bullish target that should take us to $42.2k with a very high probability. The question to me is, where will it go from there? Will it be 50k or 30k? I think a retest of the last higher high between $47-50k is of higher probability than price getting down to $31k. Read on if you are curious to know why I think that.


Jerome Powell of the FED spoke today and confirmed what the street was expecting, the 0.5% rate increase. Out of the entire press conference, there was one key takeaway that’s indicative of the future, which was when Steve Liesman from CNBC asked what the subsequent rate increase would be (https://youtu.be/ELHQgcFBFpI?t=7883), and Jerome confirmed with a firmness that it would not be more than 0.5%. Also, he confirmed that they are not looking to shake things up too much. This tells us that the increase won’t be enough short-term to fight increasing inflation . Inflation means assets increase in price, including the markets as well. The short-term I’m referring to is the next immediate month or two.


Now to the technicals. We saw across all asset classes today strong bullish momentum that put price well above support levels of multiple assets beyond Crypto. This is very bullish for me. Also, we saw a strong V shape price rejection of support on Monday; this is also very bullish . We don’t have the bullish trend confirmed yet, but I expect us to see that in the next couple of days and be set within two weeks. Why 50k before 31k, you ask? What you will see, as I indicated with (1) (2) (3), are higher highs and higher lows established since January. It’s highly probable for this trend to continue and for the price to reach 50k. Also, especially with NAS100 , we have strong volume at this bottom support level that indicates strong buying interest. 


Fundamentally, we know that only two things could drive the next bull wave; greed and the FED. We know many people will not participate in the market. However, of those that do participate, they participate due to greed. As greed sets in, prices will be marked up higher and higher with accelerated velocity because supply will be low due to lower participation. This could enable the price to accelerate faster to the 50k level. However, this high from greed won’t last forever because investors will come back to reality once faced with solid resistance; reality will set in. That reality is of the real economy, what people feel at the grocery store, gas prices, cost reduction from companies due to revenue generation pressure, and then unemployment will set in. We are already starting to see some things and industries break, but it’s simply not enough, in my opinion, to overrule greed. 


Lastly is the sentiment. We know that the fear is high right now, and we have high amounts of shorts in the market. We also know that retail often tends to be wrong, so the opposite is likely to happen.


Three legs of this stool we call the market analysis (technical, fundamental, sentiment), all 3 tell me that we are at the bottom, at least for a while. Good luck to us all!


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