Market HTF Update

On July 1st, I posted an analysis about BoJ interest rates (see first comment for the link) and talked about why there could be a correction at the beginning of August after a run in July. We had a decent run in July. HOWEVER, I don't think it is complete yet. Let me open it up. 👇

BoJ Rate Hike

Now that the elections are over, Bank of Japan only needs to focus on data to hike rates. Most analysts agree that a rate hike at this point would be too early. Although they see rate hikes possible, it is not expected until the October or December 2025 meetings. They first need a sustained recovery in wages and consumption before considering rate hikes.

FOMC Meeting

Despite the political pressure and baseless rumors of Powell resigning or getting fired (is that even possible lol), the expectations about the July meeting is clear as day. The interest rate will remain unchanged. They will say that they will be waiting for more data to come in to assess the effects of the tariffs, and blah blah. They MAY hint a rate cut in the September meeting but even that would be a surprise. It is for sure that the Fed cannot be more hawkish than expected. I'm expecting a nothing burger from the meeting.

Tariffs

The most important deals have been made with China, the EU, the UK, Japan and Vietnam. Although there is still uncertainty around the tariffs, the effects on the market will not be as severe. I think they used the deadline until the 1st of August well.

Bitcoin

Technically, it is near impossible for this leg to be complete with just a 10% above the last top (and 12% above Jan high). As I stated in my previous post, Bitcoin is at a very balanced state right now with neutral funding rates, balanced long/short ratios at the POC of the 3-week range. It should extend at least to 135k before this leg is complete although minor pullbacks are always possible.

S&P

S&P is 2% away from the JPM Collar at 6505. It is not due an immediate correction at this point.

Ethereum

ETH is still ranging between 3700 and 3900. It didn't even test the resistance zone between 4000 and 4100. If it were a weak market, the market maker would run ETH above 4100 to immediately liquidate the short positions before crashing the market.

Altcoins

Altcoins (excluding ETH and stablecoins) are nowhere close to the non-bull market overheated range (yeah I made that term up lol) between 43%-48% against Bitcoin. They are still trying to break out from 35% - the resistance at the range lows. They have more upside to go - at least until the trendline at 41%.

Sentiment

- People lost confidence in altcoins and most of the CT is talking about a "no alt season" or "only specific altcoins season" scenario.
- Coinbase is ranked #225. There is no sign of euphoria.
- We just had a minor correction in altcoins. BTC.D bounced and over-leveraged longs got liquidated. Altcoin market is not heated at all.
- As in the "sell in May" cliché, CT is now expecting a weak market in August.

CONCLUSION

TL:DR; I am not expecting a major correction at the beginning of August like what happened last year. The market is not over-heated, there is no euphoria. A run in August will most likely keep most people sidelined.

As always, I will update you if any of my ideas change after the meetings or due to data and technicals.