Some of the strongest selling pressure of 2023 occurred today, putting traders and investors on edge as they digest today’s move. 🔻
A good number of analysts believe profit-taking is beginning before the major fundamental news events later this week – and there are some big ones.
Tuesday – January 31
Can’t leave January without some volatility and drama.
- E.U. GDP Growth Rate QoQ and YoY at 5 AM EST.
Wednesday – February 1
This is arguably one of the biggest days of the week due to the massive amount of major data coming from the E.U. and U.S.
- E.U. Unemployment and Inflation data at 5 AM EST.
- U.S. Manufacturing PMI at 10 AM EST.
- U.S. JOLTs Job Openings at 10 AM EST.
- And the biggest kahuna is the Fed’s Interest Rate Decision at 2 PM EST. 👀
Thursday – February 2
To top off all of Wednesday’s craziness, Thursday gives all market participants a double whammy of interest rate decisions.
- Bank of England Interest Rate Decision at 7 AM EST.
- European Central Bank Interest Rate Decision at 8:15 AM EST.
Total Crypto Market Cap Chart
So how will crypto respond before and after? It’s a crapshoot. Analysts are certainly mixed.
But some profit-taking before the major economic news dumps this week is very probable. And it might even be desirable.
Why desirable?
From an Ichimoku perspective, a Kumo Twist is coming up between February 3 and 5.
Kumo Twists are events when Senkou Span A crosses Senkou Span B – in other words, the Cloud changes color from green to red or vice versa.
Kumo Twists have a high probability of showing when a major/minor swing high/low could occur.
While bulls would love to see crypto continue creeping higher, if it does continue to move higher between February 3 and February 5, that could mean a top is in, and a big dump could be around the corner. Something bearish analysts and traders would like to see happen.
On the other hand, some selling pressure today could extend into February 5, giving the recent move a needed pullback.
For bulls, the ideal scenario would be a -10% retracement down to the Kijun-Sen at $900 Billion on or around February 4 to develop a possible swing low before continuing the current short-term drive higher.
However, the overall market remains extremely bearish – but we’ll keep an eye on how this market progresses. 👁️