Welcome to the fifty-fifth 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 a while since the FTX/Alameda debackle, and you’d expect that by this point SBF would be either in prison or living on an unknown island under a fake name. Instead, he will be speaking at the New York Times DealBook summit on Wednesday. Let that sink in.
The coverage of what happened has been absolutely unbelievable, with talk of how his well-intentioned enterprise collapsed apparently because the market dumped, how he wants to find a way to make up for what happened and so on. Hardly anywhere do media outlets mention one crucial fact: unless an exchange is outright stealing customer deposits, there’s no way it can become insolvent, no matter what happens in the market. It can lose revenue and become unprofitable, sure, but customer funds don’t exactly have a tendency to randomly dematerialize of their own accord.
Hopefully, we’ll se a more sane approach at the Senate Committee hearing on FTX, but I won’t be surprised if they also go easy on what Sam & co. did. Keep in mind that SBF was among the top political donors, and people tend to be reluctant to indict someone that got them their jobs. What’s most worrying, however, is if the blame gets redirected to where it’s least deserved, namely to DeFi. Blaming decentralized and privacy-promoting protocols would sure be a convenient way for SBF to not only get the blame off of himself, but also continue to pursue his regulatory agenda in spite of the collapse of his empire. This tactic does have the slight flaw of being absolutely and utterly wrong, but when has that stopped regulators and governments before?
Bitcoin/Dollar Weekly chart
U.S. Dollar Index
After a “big” week in crypto, not much has changed regarding Bitcoin’s price. Another weekly close below the previous ATH only proves that our levels are becoming more and more interesting for traders. The OBV is still in an uptrend, though, which tells us that smart investors are interested in these levels and this should not be ignored. Price action on the weekly timeframe is showing a clear downtrend with three lower highs, signaling more downside. But while PA is bearish, both OBV and MACD are showing some strength which is a good sign to keep our eyes glued to the charts and see what next week brings us. Incase we are getting a bounce we will be looking at the $18,500 which is a confluence of the major resistance and downtrend line.
After Thanksgiving market hours, SPX price action remains in a similar pattern than the previous week, confirming the support and eyeing the long term trendline. The first test was passed, which was breaking above the resistance at ~ 3900, and the second test will be the downtrend line at 4100.
The US. Dollar Index showed some strength previous week, retesting the 108 level, confirming it as resistance before reversing the whole pump. At the moment I do not see any reasons why it would form a bottom here and go further up. Still, lets be patient enough to see what the next Fed meeting and CPI bring us.
Ethereum/Dollar Weekly chart
Ethereum/Bitcoin Daily chart
Last week the news about the FTX “hacker” selling has come out and since then Ether had a selloff, dropping towards the $1000 level. Even though Ethereum showed some strength in the past we can see that traders are not particularly interested in it, just by looking at the OBV which has been in a downtrend since August 2022 when ETH peaked at $2030. Even the Merge could’t manage to trigger another run above $2000. Currently ETH is not interesting for bigger players, but i think it will be in case it becomes a three digit asset (dropping below $1000)
ETH/BTC shows a clear downtrend after forming the third lower high, making its way towards the 0.065 BTC level. Similarly to the USD pair, the BTC pair is also showing a decrease in volume, which indicates that further downside is possible. My bids are ready, but keep in mind that the level is not to be trusted unless volume starts kicking in.
Blood’s content recap
New Swing Exercise
“Swing Exercise #2: Use MACD to spot reversals
1. Open a CMC top 30 coin
2. Open MACD
3. Seek divergences
Condition 1: Asset price must go up
Condition 2: Bars on MACD must go down
We learned how to use MACD for scalping, but it works just as good for swing trading”
Crypto Trading Guide PDF chapter 2 is live
“Crypto Trading Guide Chapter 2 part 1 PDF is live on my website.
Study 18 pages of Charts related topics.
– 13 Basic chart patterns
– 5 Trading indicators
– 3 Volume indicators
This is your Trading Bible. Master it.”
There’s one last thing to keep in mind: the whole Genesis saga is looking like a bigger deal than it seemed just a short while ago. The relationship between Genesis, Grayscale, and DCG (Digital Currency Group), which featured the sale of bad loans from Genesis to DCG, is a fairly complex matter, but the key things to know are the following: (1) Genesis is a huge lender in the space and (2) Grayscale runs GBTC.
In short: if Genesis stops operating, that will suck out a lot of liquidity from crypto, but GBTC is even more important. If, for whatever reason, GBTC holders get the opportunity to redeem GBTC for actual BTC or USD, this would create a ton of sell pressure. Luckily, this doesn’t seem to be that likely for now: Grayscale is raking in a hefty 2% management fee for GBTC, and this means they haven’t got the slightest incentive to give up on this cash flow. In any case, not much is known in too much detail about what exactly is going on with Genesis, but there should be much more concrete info on this by the time the next newsletter comes out. Until then, keep your ear to the ground and watch out for tail risks.