3 Things to Watch For in the Coming Week(s)

Three things to watch this week -

1. Federal Open Market Committee - FOMC (15-16 March)

• This is when the US Government will announce it's strategy (or lack thereof) for addressing inflation (for example- raise interest rates), which can directly impact markets like crypto or stocks. Before the Russian/Ukraine conflict it appeared the Fed planned to come out more aggressive in March, which would potentially drop Bitcoin and crypto further.
• BUT with the new sanctions on Russia now impacting oil, this will weaken global supply chains and increase production costs (everything needs energy- factories, transportation, etc.), so increased energy costs add to the risk of a recession. This means the Fed is less likely to tighten monetary policy in the near term so as to not further spook the markets.
• If they choose a more cautious approach to tapering this will likely give strength back to crypto and other markets. At least in the short term.

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The US Dollar Index Inverse Correlation with Bitcoin - Inflation in the Bottom Frame

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2. The Russia/Ukraine Conflict

• This is obviously dominating news cycles still. There are both bullish and bearish narratives to draw on here. In my opinion the positives are the truest story- that Ukraine raised much money for its defense via crypto. But some politicians in the US are focused on the potential to evade sanctions using crypto.
• We talked about this on the podcast and there are many reasons why it is highly unlikely Russians are evading sanctions on a large scale using crypto -
• First of all because the liquidity and exchange services aren't scaled to support an entire nation state moving/exchanging funds into it (yet) or even just the richest among them moving into crypto (thats still tens of billions of dollars).
• Continue monitoring the conflict and news cycle to see which narrative wins; and of course we hope for a de-escalation. If the conflict sees a path to resolution in the coming weeks, its very likely we see the market post a strong bounce.. then the question is how sustained is that bounce/rally, or is it a short-lived event.

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Bitcoin's 12 Year Chart and Levels

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3. US President's Executive Order on Crypto (likely release this week)

• Note that Executive Orders aren't a highly detailed piece of law/legislation. They are (in basic terms) the President telling other government heads under his command to start doing something or start -researching and planning- to do something. But it takes time to research, propose, get budget approval and implement. Along the way things can trip up EOs, to include Congress blocking funding.
• In this case if he tells several departments of the US Government to research crypto with the goal of achieving a few things- it will still take time to complete, potentially months or years.
• That said, the President's tone and what he hopes to achieve with this EO will drive how markets respond. If he comes out largely supportive of crypto innovations but wants some common sense regulations then it could be bullish. If he comes out attacking crypto or accusing it of being nothing more than a way for criminals to operate or Russians to avoid sanctions, the market will drop.

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2021 Cycle - Bitcoin Needs to Recover that 20w SMA / 21w EMA Band to Re-Confirm Bull