Welcome to the third 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.
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.
Table of contents
- Fundamental overview
- Bitcoin and Ethereum chart
- Blood’s articles, and trading tips of the week
- Concluding notes
This week we’ve seen a lot of interesting headlines that could affect crypto, and the first place to start is that the $1 trillion Infrastructure bill was signed into law on Monday.
As you may remember from the news a couple of months ago, the bill has some provisions that are not that good for crypto, with requirements for reporting all transactions over $10k and some ambiguous language about facilitating transactions that could be completely unworkable for crypto. Of course, that’s not great, but you should keep in mind that the bill won’t go into effect until 2024, so there’s still time for things to change.
A much more positive trend is that we’re seeing more mainstream marketing and adoption, with the Lakers’ Staples Center renamed to Crypto.com Arena in a $700 million deal and a bunch of companies in South Korea going all out with metaverse projects. I think we haven’t seen that much retail participation yet, and we’re going to see a ton more in the coming months.
Finally, I’ve been watching a Bitcoin wallet that’s got a very good track record for buying dips and selling tops. The wallet, which you can see here, is the biggest Bitcoin wallet that isn’t confirmed to belong to an exchange and, in fact, its activity doesn’t look like that of an exchange wallet at all. Whoever that whale is, they’ve done an amazing job at timing the market, and always added on dips before the next leg up.
They pretty much nailed the local top by selling 1,500 BTC when it was worth $67.5k on November 9, and since then they added 4,359 BTC during this dip. Nothing in the markets is certain, but all I’m saying is that someone with $6.4 billion worth of Bitcoin thinks another leg up is coming soon, and you better believe they’ve got a good reason to think that.
Bitcoin is currently trading above the $55.5k–$56.5k support zone, where we also have confluence with the daily EMA89. All eyes are now on the weekly close, since Bitcoin has lost a key weekly level at $59k-$60k.
The breakout that bitcoin had above the key level was a failed breakout and if we see a weekly close below the current support zone at $55k our bias should turn bearish. However, if Bitcoin reclaims the breakout level (key weekly level marked on the chart) we will see continuation and that would be a good entry. Closing below the support zone at $55k would indicate that we are visiting the lower $50k levels or even the EMA200 on D1.
So in my opinion there are only 2 ways to trade this, either buy a reclaim of the previous weekly level or wait for lower $50k levels.
Safe to say that the Etheruem’s perfect staircase trend has broken and dropped for over 13%, however the support at $3960 was strong enough and ETH bounced back over $4k which is a good sign.
For Ethereum to continue its rally we either need to reclaim the current trend, which would be bullish, or at least maintain the support zone which is around $4k. Worst case scenario here would be that ETH gets rejected by the EMA21 on D1 and forms a lower high which would indicate more downside.
If you are looking to long you have 2 options in my opinion, one is waiting for the reclaim of the trend and after confirmation go nuts or buy the retest of the $4k support and pray it holds. If we see signs of rejections at the trend we can also enter in a short with a tight SL above the EMA21.
Looking at the ETH/BTC chart we have a strong bounce off the key level that has been barely holding lately. As long as this level holds it’s better to hold ETH than BTC in my opinion. As soon as we lose this level we could go back to adding more exposure to Bitcoin.
Blood’s content recap
“Mark your candles open and significant highs/lows depending on your TF.
Replicate on Lower Time frames. Volume expansion shows interest at these levels.
Use them to with S/R levels forming to find confluence and trade those levels.”
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At this point, there’s no reason to think that this dip is anything other than a leverage shakeout, since there’s no important catalyst to push prices lower and keep them there. Inflation sure as hell isn’t going anywhere, and we’ve just seen that maybe the largest single Bitcoin whale in existence is buying the dip and expecting upside.
But regardless of how soon this upside comes, even having Bitcoin stuck in a range for a while would be great for altcoins. A lot of alts are on very important higher time frame support levels and we’re seeing some great risk/reward setups showing up. If you want to take advantage of that as much as possible, just make sure that you’ve got the right skill for the task, and the best place to get that is https://bloodgoodbtc.com/. I’m putting in a lot of work to get way more content ready for the website, so make sure to bookmark it and check it regularly for everything from calls to educational content!