Crypto Market Outlook: Tough Times Ahead, Part Deux

Volatile is the best word to describe the price action in crypto markets of late. Through a combination of the disastrous geopolitical landscape, slowing economic growth and impending central bank tightening, the price swings in such high-beta risk assets as crypto have been extreme. It is a difficult environment out there.

Not a whole lot has changed in my crypto outlook over the next few quarters since my most recent post on the subject. Most notably due to the deteriorating macro environment, I remain bearish over the medium term. However, we are beginning to see some positive on-chain developments of a longer-term nature which should be encouraging for longer-term bulls. For the sake of positivity, such developments will hence be the focus of this article.

Starting with the technicals however, the daily chart for BTC shows just how volatile the market has been of late. We have now had multiple rejections at both the $45k resistance level, but also the $34k support area. Short-term, these are the levels investors should keep an eye on. Should we break below $34k, then $30k seems inevitable and should be bought, whilst conversely, a break above $45k would have me reconsider by bearish tilt and could be the impetus for crypto’s macro decoupling.

For Ethereum, the price action is looking somewhat precarious and is seemingly readying to make a move one way or another. $2,350 remains support whilst $3,350 is the key resistance area to watch. Should we break below $2,350, $1,700 looks like a reasonable proposition and again would represent an excellent long-term buying opportunity. There is however more downside for ETH relative to BTC at present.

Turning back to Bitcoin via the weekly chart, it is looking more and more likely that we at least test the $30k key support level at some point this year given the unfavourable macro backdrop. Again, as I have repeatedly stated in the past, $30k would be an absolute must buy opportunity for those bullish crypto long-term.