Welcome to the tenth issue of Bloodgood’s notes. The idea of this newsletter is to give you an overview of the previous week’s fundamentals and what happened on charts as well as to remind you of this week’s articles, secret TA tips, and trading calls. Basically, it’s about giving you all the key info in one place.
Table of contents
- Fundamental overview
- Bitcoin and Ethereum chart
- Blood’s content recap
- Concluding notes
As this community grows, I have a duty to give back to all of you that helped me and supported me to become what I am. This free newsletter is just another way to share my experiences and prepare you for the journey that’s ahead of you.
After a fairly uneventful few weeks in crypto, we’re finally seeing some headlines and news stir up, and some of these are likely to attract a lot of new attention to the space. Probably the biggest headline is the one about Walmart (and no, not the fake Litecoin news that we saw a while ago): according to some regulatory filings, Walmart is serious about entering the crypto and NFT space. Not much is known about this yet, but what is certain is that they’re considering launching their own virtual products, and this is likely to include a token, NFTs and possibly a larger move into the metaverse.
What’s more, Rio de Janeiro, the second largest city in Brazil, announced that 1% of its treasury will be invested in crypto. That’s not a huge percentage, but given that the city has a population as large as that of El Salvador (close to 7 million), it’s definitely a big headline. Along with everything else that’s going on – FTX launching a $2 billion crypto fund, Jack Dorsey starting a BTC legal defense fund, Tesla accepting Doge in its online store, etc. – this was one great week for crypto. This will bring more exposure, and that means more people entering the market.
Bitcoin/dollar is still trading above the key weekly support at ~ $40000.
There are no drastic changes from last week’s price movement when the daily support at $44500 was lost. The key level right above 40k seems to be strong, except on january 10th when it was lost briefly and there were many bids filled across exchanges. The latest crashes were of course a result of downside in the stock market and we are yet to see whether that’s the end of it.
Looking at the daily chart we can see that daily levels are being respected as Bitcoin got rejected slightly above $44000 and the $40500 (previous range high) level seems to be holding for now. We discussed in the previous newsletter that both RSIs were in the oversold zone and that we were due for a relief bounce, which we finally got but the bounce was not strong enough to reclaim the $45k level.
So to sum up, the $45000 level is now resistance that we have to reclaim in order to see some bullish action, that level is confluent with the daily trend (EMA13 and MA20) which can be used for some scalp shorts. For now I will be buying the key weekly level and derisk at the daily resistance until Bitcoin shows some strength, or if we get a weekly close below $40k we can look towards $32000 once again.
Not much has changed on Ethereum charts since the previous newsletter.
The key support level we discussed ($2950-$3070) seems to be holding for now and similar to Bitcoin we saw some strength after getting a wick below that level. After the level has held we saw ETH follow Bitcoins bounce and got rejected at the daily support and the daily trend.
To be honest trading ETH was max pain since it followed Bitcoin’s movement, so I have decided to mainly focus on Bitcoin until the ETH/BTC chart shows some strength.
Right now, the Ethereum/Bitcoin pair is currently trading in the middle of two key levels. I will leave ETH alone and focus on Bitcoin until one of these levels is reached.
To sum up, similar to Bitcoin’s movement, ETH also got rejected at the daily resistance and it is currently trading right below it. I will not trade it unless we get a retest of the $3000 zone or reclaim the $3450 level.
Blood’s content recap
“What to do after liquidation cascades?
Look at huge wicks, they tend to get filled slowly.
Remember that sometimes you will have to wait weeks to enter a high conviction position.
Place limit orders at the bottom of cascades.
Patience makes a trader. Capische?”
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Overall, the recent headlines are showing far more bullishness than the charts themselves. Still, this is likely to spill over into the market if we do see a new wave of participants piling up, and it’s also important to remember that, even if BTC and ETH are boring, there are always trending coins to be found. After SoLunAvax, FOAN (Fantom, One, Atom, Near) gained a lot of hype, and it’s precisely those kinds of opportunities that can bring you the biggest returns in a market like this. Simply find what’s trending (and see why it’s trending, i.e. if it’s just a random pump or part of a larger narrative), find good entries with decent risk/reward, and you’re set