Welcome to the thirty-sixt 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.
It’s been an interesting week looking at macro-level developments. For a start, the euro dipped below parity (that is below 1 USD) for the first time since 2002, as concerns over the growing energy crisis have shaken confidence in EUR. It managed to get a bit above the 1:1 level now, but this is still significant, especially as winter is getting ever closer (and with it, increased demand for gas used for heating).
Meanwhile in the US, the CPI came in at 9.1%, higher than expected, showing that inflation certainly hasn’t topped yet. The Fed will definitely have to be hawkish with upcoming hikes, but one important thing to note is that BTC recovered much better than the S&P 500 following the inflation news. Could this mean that it’s serving as a leading indicator, with investors increasingly convinced that the US will have to bail out the EU and Japan by buying their bonds (and turning the printing press back on), in return for their allies’ continued refusal to rely on cheap Russian gas? If so, this could be extremely significant on the macro level.
While BTC has been outperforming equities (to the upside, for a change), ETH is the one that’s been really shining. It looks like the main catalyst behind Ethereum’s outperformance is that everything appears to be going according to plan with the long-awaited Merge, when Ethereum will switch over to Proof-of-Stake. This transition will significantly decrease issuance of ETH – apart from opening the door to new scaling solutions down the line – so it’s not surprising that it would have this effect.
Bitcoin/Dollar Weekly chart
Bitcoin/Dollar Daily chart
Bitcoin eyes another test of weekly 200 EMA, is this time different?
A very volatile week with Bitcoin testing the levels below $19,000 ended up with a weekly close at $20,600. At the time of writing, we are testing the weekly EMA 200 which has been too hard of a nut to crack since the June crash. Moreover, we are also at a daily resistance where the ascending triangle has been forming for some time. We know how ascending triangles play out right?
Indeed the structure looks bullish, however the volume is slowly decreasing which could be a sign of bulls lacking strength or it could tell us that bears are not interested in selling at these prices anymore, meaning we are going higher. Moreover, the daily Stoch RSI is in the overbought area, meaning we could see some retrace before going higher. My plan here is derisking the positions I bought at the lower levels and waiting for a reaction. Break out above EMA 200 on weekly, confirmed also with a breakout on daily and then we can safely re-enter and aim for $30,000.
To sum up, we are at the weekly EMA 200 which is a strong resistance, we are also trading below daily resistance, the ascending triangle is formed which is bullish, the volume is decreasing and the Stoch RSI is overbought. Mixed signals, but I already told you my plan 😉
Ethereum/Dollar Weekly chart
Ethereum/Bitcoin Weekly chart
Ethereum, what are you doing?
In the previous letter we discussed the $1075 level and once again we got a wick below it and it was quickly bought up. Seems like the bulls were very interested in the ETH sub that weekly level. That was the 5th weekly wick below that level and it seems that sellers were exhausted as since the last wick, Ethereum is up 45%. At the time of writing, ETH is trading around its 2018 all time highs and we are waiting to see its reaction here.
ETH has also reclaimed an important level, which we have been discussing for the past few newsletters, the 0.059 BTC level. More importantly, it is also trading right at the next key weekly level at 0.065 BTC. We could see some retrace here as well, hence, similar to Bitcoin, I am derisking some ETH here and waiting to see what Bitcoin does. As soon as we get a sign of a breakout I am re-entering. The weekly Stoch RSI is just exiting the oversold area, which is a good sign but the daily has been overbought for some time.
Blood’s content recap
Goals till the Autumn, have you set yours?
“Goals to reach till Autumn
– Beat Bears
– Buy a seaside Villa
– Make few of you millionaires
– Accumulate, dca as much BTC,ETH as i can
– Launch a Bloodgood platform
– Visit north pole
Something to keep in mind
“I am teaching all of you how to be free, not how to become Millionaires and then lose it all by overspending.
Passive income generated by gains is the Key.
Every man who says he would prefer 1 million over 10k/month 4life is Wrong”
Just because we’re seeing some signs of a macro pivot in risk assets doesn’t mean that you should take this to mean that the bottom is certainly in. While there are some good reasons to believe that the US will have to bail out its troubled allies and crack the printer back to 11, this is still happening against the backdrop of incredibly high inflation and rates looking poised to go back up to levels we haven’t seen in a long time.
If we do get confirmation of a shift soon – note that ETH has already started painting a bullish market structure – then ETH could very much continue leading, especially if the Merge is implemented according to plan. This could also mark the start of a new era for DeFi: with the recent 3AC collapse and systemic contagion (much of it being fatal for many large players), it might be time for the market to take notice of what did and didn’t work as expected. Centralized lending/borrowing institutions got rekt, but meanwhile for the biggest DeFi protocols – where 3AC and others also had insanely huge loans – it was business as usual. No bankruptcies, no lost funds, nothing. In fact, all of the insolvent institutions paid off their DeFi loans first, because they knew that these protocols will just liquidate their collateral and continue operating without a second thought. No court or bankruptcy procedure can stop them. They just work, no matter what. How about that for a headline instead of the doom and gloom about 3AC?