Fed bearish comments

Mar 17, 2022

Morning folks,

Despite just 25 bp point move from the Fed, overall comments are bearish for BTC market. The terminal rate is raisen to 2.4-2.8%, cycle term is extended until 2024 and GDP forecast is cut from 4% to 2.8%. It means that economy works with negative performance and should keep doing so in foreseeable future. Fed is few steps behind inflation that now is 8% and 12% on MoM basis. As BTC generates no passive income - dividend or interest, hardly it could compete with bond market, and rising rates is solid headwind for performance. This makes us to keep our 26K target valid.

On short-term background, market shows wobbling action, giving no attractive trading setups. As bulls as bears could recognize multiple potential butterflies in both direction. It is not forbidden to deal with them, but with environment of wide uncertainty, we mostly gravitate to bearish scenario. Thus, BTC reaction on Fed decision looks weak, market wasn't able to reach the upper border of big triangle, which we treat as sign of weakness. To avoid setting too extended target, we suggest that BTC could try to complete downside AB-CD, or butterfly in short-term with target around 35.7-36K area.

But trading process now impose high uncertainty and big risk because of necessity to anticipate possible pattern. This is suitable to not everybody. Reasonable mind is needed to make a decision on taking any position. For the truth sake to wait is probably the best decision now.