Citing expert trader Nicholas Merten, the CoinSpeech team has gathered the most critical insights from his latest market analysis. You’ll find Nicholas Merten’s new video embedded at the bottom.
Unprecedented CPI Print and Market Reaction
Merten highlights an incredibly significant day due to the recent Consumer Price Index (CPI) release. He notes, “Today is a super important day because… the CPI release… has been the first time within the expectation, first time in seven and the second time in the last 10.” This event is set against the backdrop of Federal Reserve Chair Jerome Powell’s upcoming press conference, sparking substantial market movement.
The CPI print came in lower than expected, causing significant reactions in pre-market trading: “You have seen on the pre-open… multiple spikes, especially late short liquidations that were expected.”
The FED’s Dilemma and Global Impact
Commenting on the broader economic landscape, Merten draws attention to the pressure faced by Jerome Powell: “European Central Bank has already conducted the rate cuts and Canadian Central Bank has conducted the rate cuts. It’s super interesting to see how Jon Paw would sustain the pressure of journalist and Treasury and Janet Allen who are begging him to cut the interest rates.”
Merten elaborates on the significance of this pressure, citing an open letter from Elizabeth Warren to Powell, advocating for the rate cut to align the Federal Reserve with European and Canadian counterparts, thus avoiding “additional carry trades or a very strong yield change.”
Key Trading Opportunities in Current Market
Merten examines several promising trades. He mentions, “We will see… a potentially promising position in GameStop.” Additionally, other stocks like “car parts are roughly 9% today,” and “sun power Corporation is also significantly up.”
There’s a special focus on Ethereum and Bitcoin strategies post-CPI release. For Ethereum, Merten states, “My stop loss in this case would be mid Monday and the main reason… we are still in the bearish market structure.”
He offers a cautious yet methodical approach to trading Bitcoin by emphasizing range trading: “You want the Bitcoin price to go above the Monday High… and then you are looking forward to longer than retrace.”
Contrarian Trading and Long-Term Strategies
Merten emphasizes the importance of understanding market structures rather than chasing every bounce: “In a downtrend, you short; in an uptrend, you long.” He advises against reactionary trading and stresses the importance of sticking to well-thought-out trading theses, as seen in his approach to a potential Ethereum trade.
Reflecting on broader market movements, he also considers the importance of tracking stability and patterns in commodities and other indices, including “oil,” which he predicts will see a bullish rise. This, he notes, will simultaneously impact traditional and crypto markets: “Commodities… are trading very, very clearly in those channels.”
Final Thoughts on Current Market Impacts
Merten concludes by urging traders to be cautious and attentive to the Federal Reserve’s upcoming decisions and their market implications: “Everything is subject to change all based on Rong power speech. So please don’t take positions just yet… try to watch the conference, try to see how the market reacts.”