September might not be a great month historically speaking, but so far it’s off to a surprisingly good start. Apart from the price action in crypto, which I’ll cover in more detail below, it’s worth noting that EUR/USD finally had a bit of relief to just above parity, the S&P 500 more than fully retraced the previous red candle on the weekly, and there are some huge news events coming this week.

Most importantly, tomorrow the Fed will release CPI data for August. Expectations are around 8.1% for YoY inflation, so this is the number to keep in mind when the all-important press release comes out tomorrow. If we see inflation at or below this level, that will be very bullish for crypto and equities. Don’t forget that, no matter what, the Fed is still pretty much committed to one more 50 or 75 bps rate hike, but the key question is what happens after that. If inflation seems to be under control, the famous Fed pivot narrative will be back in full force.

Also, this week will bring the long-awaited Ethereum Merge. I’ve talked about this extensively in previous newsletters, so I won’t go into the details here, but I’ll just reiterate that you should be extremely careful with trading around that event. From potential hard fork tokens to the insane amount of open interest from traders that are hedging spot ETH via futures to get more exposure to those forks – it looks like it will be a very wild ride.

Bitcoin

Bitcoin/Dollar Weekly chart

Bitcoin/Dollar Daily chart

Bitcoin drops below $19,000 for a moment, waking up the bulls to push it above $22,000.
At the start of the week, the situation was not ideal, as we were trading right above the weekly support and were eyeing the breakdown which happened. It seems like closing a daily candle below the weekly support triggered bulls to step in and scoop up some of the orange coin. Volume started increasing, bears gave up and we got a green dildo on Friday to push above $21,000 and get a good weekly close.

Daily structure shows perfectly what was going on and you can see the exact moment where volume started increasing and price went up. The weekly doesn’t tell us much except that a higher low was made, if we compare it to the June 2022 potential bottom. The volume shows strength as it has been increasing since Dec 2021 volume lows.

Daily stoch RSI is heavily in the overbought area and weekly is just about to break above, which indicates that bulls could soon be exhausted and we could see a retrace. But even if we get a retrace, I am expecting bulls to defend the key weekly level, as well as the $20,000 level.

Ethereum

Ethereum/Dollar Weekly chart

Ethereum/Bitcoin Weekly chart

Ethereum Merge week!

ETH has been showing strength against Bitcoin all up until now as it gets rejected by the last level on my chart, which lies at 0.085 BTC. To be honest, I was expecting ETH to push above the level as Thursday approaches, but it looks like investors are sitting on the sidelines to see if the Merge will be successful or not. What will happen afterwards? Who knows: as I have been telling you in the past few letters, I do not suggest trading this event.

If the Merge is successful, price will go up for sure, even if we get a short term dump. So IF we get a dump after the Ethereum foundation announces that the Merge was successful, I strongly suggest buying it.

The USDT pair has approached resistance, leaving our bids behind at $1350. Anyway, I will be looking to derisk some Ethereum as we approach the resistance again. We nailed it previously as ETH approached the level and we sold the top. Even if we end up selling and it goes higher, we will buy again at the retest of this level. I would rather miss a few percent to the upside then not sell resistance and end up going down with it.

Similarly to Bitcoin, ETH‘s Stoch RSI is right in the overbought area, which could result in a retrace and our resistance could come into play.

Blood’s content recap

Crypto monopoly 101

“Binance will remove $USDC as a tradable asset by Sep 25 to push their $BUSD.

They also hired ex Brazilian central Bank President as advisor, because bankster connections matters. For regulations.

Binance is deleting competitors like Google did 10 years ago.”

My new investment

“Invested shitload of cash in a $BTC & $ETH AI price prediction tool with a current 70+% hit-rate.

Currently in testing mode. I want one month of testing before sharing.

Once ready, I will share predictions for Free.

AI is the future, like it or not.”

Concluding notes

Liquidity is still king, and nothing can have as much of an impact on the market as Fed policy, but in the recent weeks and months we’ve also seen some interesting narratives appear in the crypto market. Obviously, some of these are directly related to the Merge (layer 2 scaling solutions being one good example, while Eth2 staking protocols are even more so just a higher beta play on the Merge), but others are a bit broader, like decentralized derivatives protocols.

Nevertheless, pretty much everything that’s popping up is related to the Merge in one way or another, so it’s worth being careful with risk in case there’s any unforeseen technical difficulty, but the odds of something like that happening are extremely low. Right now, we can just hope that the hype around the Merge will be sustained after the event itself – this, combined with favorable liquidity conditions and the Fed pivot, could well and truly send everything much higher than anyone is ready for.