Bitcoin Reversal – A Confidence Shaker

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Today we will be covering...

• Market Summary

• Technical Analysis

• Inflation Analogy & Commodities

• Bitcoin 4Y Cycle

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• Sentiment

• Let Us Know Why You Like BraVoCycles

• SPX Analysis

• VXX Update

• Forex

• Bonds

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Market Summary

There is not much to add to what I said on Sunday and Monday. The main market indexes continue the pullback/consolidation that started last week. The February seasonality keeps a lid on the market, except for the outlier last Thursday, which was strong.

Although the already topped option could not be ruled out, I still expect a bounce from not much below today’s close, specifically from the 5,020-5,040 area in SPX, into early March. At least that’s what my cycle projections suggest.

Then I expect a correction in the next 2-3 months, initially. Cycles, EWT, technical, and sentiment all support a correction in the intermediate term, but the market is very resilient. Raising cash on the rips is not a bad idea in situations when the market is overbought.

Market data as of 4:20 pm EST on 28 Feb. 2024.

Technical Analysis

I ran into this interesting chart on the S&P500 over Bonds ratio. Self-explanatory.

NQ had 6 rejections at 18k level. A typical bull flag for one more pop higher. Bears could argue that it is the start of a leading diagonal down, which is possible if the pop last week was a slightly truncated 5^th wave.

Inflation Analogy & Commodities

Thinking out loud. Is potential bottoming in commodities going to make the inflation analogy with the 1970s look good?

Bitcoin 4Y Cycle

A few weeks back, I posted in the premium section the potential for Bitcoin to invalidate the 4Y cycle target to 5K and generate a 4Y up target, as shown below. To keep it valid, Bitcoin needs to stay above the gray FLD band. Below it, watch out.

In the short term, the Coinbase crash around noon also caused a monumental reversal in Bitcoin that spiked this am well above the Keltner channel. This is a technically negative development and a confidence shaker. As of this writing, 7 pm EST, Bitcoin bounced strongly and generated a target toward 63-64K as shown in the chart below. But so far it is a corrective 3-wave move and there are no higher short-term targets so it may revert back down from the green box.

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Sentiment

Consumer confidence resembles similar peaks in the past.

eBook: 3-Year US Stock Market Outlook

The stock market will exhibit significant volatility this year, IMO. To prepare for market swings down and up in the next couple of years, read our eBook about the stock market outlook for 2024-2026. To get it for FREE, share the link below with your friends, family and on social media and if 2 friends subscribe to BraVoCycles Newsletter using your link, as confirmed by Beehiiv, you get our 3-Year US Stock Market Outlook eBook FREE! We’re excited to share more of our content with your friends and family and the cutting edge technical analysis in our eBook with you.

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