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Michaël van de Poppe - 20 September 2022

FOMC Meeting and its influence on Bitcoin!

Welcome to a new week! Nowadays, there is an event every week that can influence market direction. Similarly, this week is not new. In today's Trade Letter, I will give you an overview of the FOMC meeting, how FedEx is kicking off another blow to the economy and what else to expect for this week.

Macro-Economic Outlook

Like every Monday, we begin today with this week's events. In the image below I indicate which ones are relevant to keep an eye on, but of course it goes without saying that FOMC is the main event.


Calendar | Crypto Craft

Potential Market Movers*

  • All FOMC related events

  • Powel speaking

  • Lagarde speaking

Important data points (Non-market moving)*

  • Existing home sales

  • BOJ policy state

  • Unemployment claims

  • PMI numbers

* The distinction made between: Market Moving and Non-market moving is the difference between speeches and data points that capture the attention of the majority of the investment market where sentiment can be set (statements that determine market direction), or the data points that are supportive of assessing the world economy with forward looking views.

Now that we are at the FOMC again, the first in 2 months, we know that these meetings determine the Fed's policy to push the economy either toward expanding or contracting. It currently does this by QT / withdrawing liquidity from the market. 

In our Trade Letter we discuss this topic extensively and give our view on what to expect from the FOMC. Besides that, the Global Consumer Confidence will be discussed and we explain why that indicator is way more important for the economy.

FOMC Signals:

What we are looking for is a signal. For example, this could be that instead of the expected 75/100 bps, the Fed executes a 50 bps hike without further explanation. This is a signal of a broken economy and a first step toward easing.

At this stage of the economic downtrend, asset markets are ultra sensitive to this type of signal. If this stays out then we fall further, but if we see something of a signal then this can be seen as bullish.

We give our clear expectations on what to expect in our Trade Letter.


What kind of direction can we expect?

BTC

TradingView Chart — TradingView

Bias: Bearish

Very clear downtrend where we continuously lose support and seek liquidity on the downside. The last major liquidity point is around 17.6k, so we will most likely revisit the resistance zone of 20k and reevaluate from there.

Of course, there are some other charts like the DXY and the SPX that will influence the direction of BTC and therefore the whole crypto market. 

In our Trade Letter we analyze those charts to prepare you the best way possible.

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