BITCOIN & ALTCOINS PULLBACK! IS THE FED ABOUT TO CRASH CRYPTO?

**Tony Edward** (0:05)
Hey, folks, welcome into the Thinking Crypto Podcast, your home for cryptocurrency news and interviews. I'm your host, Tony Edward. On your way in, please hit that subscribe button, as well as the thumbs up button and leave a comment below. If you're listening on a podcast platform such as Spotify or Apple, please be sure to follow and leave a five-star rating. All right, folks, we got to start with Bitcoin because we have a pullback. But this should come as no surprise, because what have we been talking about for the past few days? Plus, I've been mentioning it in my newsletter. Bitcoin was in the extreme overbought zone. So naturally, by the textbook, it was due for a pullback. The question was not if it was going to pull back. The question is, are we going to see an impulsive pullback where we dump below 70k or what the bears would like you to think? Or is it just a shallow pullback to build support levels, some sideways action? We build the support levels again and then we rip higher. As the bears start to load up their shorts and they get trapped again and we have another impulsive move. That's certainly possible. So let's look at the daily. The RSI coming back down to 70 It was so overheated, it was up to near 80 So extreme overbought, right? And the MACD shows that the bulls are losing momentum. So anticipate that we could chop sideways or go further down. And I'm looking for, we must hold the support level of $70,000.
And then we are looking for higher lows, of course, along with higher highs as the rally continues later into September, as well as October and so forth. So we got to be patient, let the market do its thing. After this very strong impulsive move, we became extremely overbought and naturally we are seeing a pullback. But from the weekly time frame, the higher time frame, things still look very bullish, right? We've been tracking the bullish divergence, which has been playing out beautifully and nothing has changed there, because again, this is the higher time frame. So regardless of what happens on the daily, the weekly is still looking good. And then the inverse of that, the USDT dominance, which is the stablecoin liquidity, I've been highlighting to you guys that on the daily, it was oversold, extreme oversold, where it's in the red.
And this is a complete inverse of what's happening on the Bitcoin daily chart, where it was in the green, the extreme overbought. So naturally, you're seeing the inverse happen, right? Bitcoin is cooling down, the stablecoin liquidity is starting to pick up back again. And then USDT dominance on the weekly, still looking great. Bearish divergence playing out here like we've been talking about. So it still shows there's room for this to go further down. But again, it's in the weekly time frame. So we're going to have maybe we chop sideways for two weeks, and then things start to pick up back again. Now, the other thing we want to look at is the macro with the stock market, because crypto tends to follow the stock market. I personally believe it's the market makers. If something bearish is happening in the wider markets, especially like the S&P 500 and NASDAQ, crypto market makers tend to follow that, and it absolutely makes sense. Crypto is a smaller asset class, and there is rotational liquidity, but if the stock market continues to show weakness, and it continues to go further down, then you can imagine crypto is probably going to stay in the sideways chop for a while until the stock market starts ripping again. The good news is on the S&P 500, it looks like bears are losing momentum, and the MACD is about to flip bullish, but probably in another week or so or two weeks, and then I think crypto will follow. So lots of patience needed here after this big move, and pretty much it's the same story for the NASDAQ. So again, lots of patience. Now, I know some people are going to come on and say, Tony, the reason Bitcoin sold off is Fed Chair Kevin Warsh came out hawkish saying, we need to raise rates and the traders are betting that there's going to be a September rate hike.
That may be the catalyst, but that doesn't change the technicals of being overbought and buy the textbook at reversal as needed.
Now, will the Fed actually raise rates? Well, guys, let's put our thinking caps on here.
A Trump appointed Fed Chair, Kevin Warsh, is going to raise rates right before the midterm elections?
I don't think that's going to happen, my friends.