CRYPTO INVESTORS PREPARE FOR THE FED'S FINAL HAND

Happy Saturday crypto champions!

It has been a surprisingly green week in the land of crypto - not what I was expecting - especially after we experienced the fall from grace during the week prior.

But the bullish moves could well be eclipsed by what is to come...

This week, the US Federal Reserve is set to play their final card in what has felt like a very long interest rate hand.

So, as crypto investors, we need to unpick the different scenarios that might occur this week and see how they could affect crypto prices.

In this week's newsletter we will...

RECOGNISE - Next week's market moving macro. Is this the final rate hike?

RESPOND - Prepare for altcoin season with this 1 chart

RESEARCH - Data is the new oil (+ 1 new crypto to watch)

Recognise - Next week's market moving macro. Is this the final rate hike?

It feels like it's been a long time coming, but next week could be the final time that the US Federal Reserve increases interest rates.

This is not the most thrilling of topics - I know - but it is crucial when you are trying to become a profitable cryptocurrency investor.

So, just to refresh - to tame runaway inflation (brought on by excessive money printing), the Fed has gone on a BIG interest rate rampage - upping interest rates at the quickest pace ever seen.

In March 2022, the Fed implemented their first 25 basis point hike, taking the Fed Funds rate to 0.25-0.5%. In May 2023, we could see them complete the cycle and take rates to a peak of 5-5.25%.

But, promisingly, on May 2nd, it could be the last.

We have been told by the Fed Chair, Jerome Powell, that 5-5.25% is likely the maximum.

It's a fact that is now priced into the market. Everyone is expecting this final rate hike to be 0.25%.

But, just so we have the bases covered, if the Fed chooses not to implement an interest rate hike - expect crypto markets to rally.

However, if the Fed chooses to continue the drive and implement an unexpected 0.5% hike - expect crypto markets to pullback.

With those different scenarios described, the more important question now is - if the Fed has reached their peak interest rate, what do they do from here?

Going back to the CME's FedWatch Tool, traders believe the Fed will hold a 5-5.25% Fed Funds Rate until September 2023.

Then, during the Fed's 20th September 2023 FOMC meeting, the market is expecting the first interest rate cut.

Will this happen?

Who knows.

But after this Tuesday, we might just start to see a bright glimmer of light start to appear on the horizon.

For the week ahead on Bitcoin, if the Fed's comments are bullish I will be watching closely to see if the local daily high of $30,500 can be broken.

Alternatively, if the Fed's comments are bearish, I will be watching to see if the daily support at $27,000 can hold. Failing that, it will be down to $24,000.

Respond - Prepare for this altcoin season with this 1 chart

Are we close to altcoin season?

Definitely, not.

But that doesn't mean we can't be prepared for when it happens.

And the best chart that can give you an indication of exactly when it starts is the Bitcoin Dominance chart - ticker BTC.D

The Bitcoin Dominance chart measures the market capitalisation of BTC against all other altcoins in the market.

Put another way - if you totalled up the entire market cap of all cryptocurrencies, the chart shows what percentage Bitcoin makes up.

So, why is it so important?

Well, when the Bitcoin Dominance chart is in a constant decline, more liquidity is flowing into altcoins.

And if more money is flowing into altcoins, high-value altcoins are only likely to go one way.

Below is a copy of the Bitcoin Dominance chart on the monthly timeframe.

On it, we can see the two most prominent altcoin seasons:

1. Approx. March 2017 - January 2018
2. Approx. January 2021 - December 2021

During both of these periods, the market share of Bitcoin significantly dropped.

We need to be on the look out for the start of the next big drop.

For me - the 200-week moving average on the weekly time-frame is a good indicator to keep a close eye on.

The Bitcoin Dominance chart last dropped below the 200-week moving average in March 2021 - if you had entered altcoins in a big way at that time, you would be a very happy investor right now!

Research - Data is the new oil (+ one crypto to watch)

You may have heard this phrase before - "data has become the new oil".

And it's true. Those that control our data, control our world.

However, data needs to be stored. And what better way to securely store accurate and uncompromised data than with decentralized blockchain technology.

The crypto that I have on my watchlist in this space - and the one that I wanted to share with you guys today - is AR, the coin of Arweave.

Arweave is a decentralised data storage protocol focused on allowing the storage of real world data on the blockchain - permanently.

But there are four reasons why I like this coin and project in particular:

• The use case is enormous. There has never been a more important time to have a protocol that allows the storage of verifiable data (data that can't be compromised).
• It targets the enterprise space and has recently secured a partnership with Meta.
• The AR has real utility in the protocol. It is directly required for the storage of data.
• Although I don't like focusing on ATHs - it is worth mentioning that if the AR coin returned to ATHs it would result in a 900% increase in value.

It's for these reasons, that AR is firmly on my watchlist.

And that wraps up this week's newsletter!

Thank you so much for subscribing and being part of something brand new.

I hope you enjoyed this fifth issue of the 80/20 newsletter and hope that it is helping you cut through the crypto noise.

As always, if you have any feedback or you would like to see something different in the newsletter - please reach out! Every idea is a good idea!

Have a great weekend and I'll see you for the next one!

James

CEO & Founder of Access All Crypto

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