Welcome to the fifty-ninth 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.
Merry Christmas everyone and I wish you all the best in 2023! As this year is drawing to a close, we’re seeing incredibly low volatility on Bitcoin—its lowest point since 2018, in fact. With most people taking a break from the markets until early January, it’s not too likely that this kind of low-volume and ultra-low-volatility environment will change until then.
The only notable development in crypto is the ongoing Bitkeep hack: it looks like attackers managed to get users to download malicious app packages to their phones, which then stole their private keys and drained their funds. So far it looks like $8 million was lost, and it’s not entirely clear how that happened, i.e. whether users got the app packages from phishing mail or if attackers managed to compromise Bitkeep itself. In any case, looks like this year is really driving home the lesson of security and the need for cold wallets.
Bitcoin, SPX and Gold
Bitcoin/Dollar Daily chart
SPX Daily chart
Gold Daily chart
Bitcoin seems to be in Christmas mode as well as it has been “sleeping” for some time now which can be seen by candle sizes as well as volume. Since we are not seeing much movement I decided to go to the daily timeframe and see what’s going on.
After a rejection at the range high (above ~$18,000), we once again dropped below the the short term trend cloud which is comprised by the 13, 25 and 32 EMAs, but we are still trading above the point of control. Bitcoin being stuck between the PoC and the EMA cloud puts traders in tough spot, because anything can happen here, so it’s best to stand aside and see which of these holds. Dropping below the PoC should tell us to look for shorts, and breaking above the cloud should tell us to look for longs.
SPX did not even bother to retest the ~3900 level which seemed to be a strong support as it was tested a couple of times before breaking down. Currently there are two levels of interest. If you are short or if you are looking to bid, you should look at the 3650 level which was the low in June 2022, tested a couple of times in October. If SPX suddenly pumps, you should look at the 3900 level as well as the downtrend line.
Gold continues to be strong and is still in an uptrend, however it didn’t manage to break above the 1810 level. As long as SPX and crypto keep crashing we could see gold outperform. Breaking above the level mentioned above could trigger a run above 1850.
Ethereum/Dollar Weekly chart
Ethereum/Bitcoin Weekly chart
Similarly to Bitcoin, Ethereum is also in Christmas mode. Still in the downtrend, making a higher low and it is slowly bleeding towards the June lows below $1000. My bids at that level remain untouched, but I am confident we will reach them sooner than later. The volume has been decreasing and there is no bullish bias at the moment. If we are patient enough and accumulate the key levels, we will succeed.
The ETH/BTC pair showed some strength in the last week, but no real movement was seen and I don’t think it’s worth mentioning. The movement in the middle of the range does not interest us and we only play levels that I have been mentioning in the last few letters.
Blood’s content recap
Master Order books and Heatmaps
“No matter the strategy, as long as you trade on CEX, your trades will go through an order book.
Depth charts, short squeezes, spoofing, and more in Chapter 4.
Chapter is available on my website.
“Bull market will not begin when good news come out, by that time prices will be way higher
You should observe how BAD news impact the market.
If negative news fail to drive #BTC lower, someone is absorbing the selling pressure.
This is the kind of environment you should seek.”
This last newsletter of 2022 is a good time to take stock, reflect on where we’ve been and where we’re going—personally as well as in terms of the industry as a whole. In the midst of a low-volatility bear market, some holiday spirit can definitely help keep our outlook from getting too bleak. Of course, this is a market environment that’s very difficult for newer traders to navigate, but one of the ways that I hope this newsletter can help you is by learning to look at things level by level and keep a cool head whether the market is panicking or blind with euphoria.
No one knows exactly what will happen in 2023, and the key to making it in the long run is to realize that you don’t need to predict what will happen in the first place. If you rely on predictions and convince yourself they’re absolutely true, well, first of all, you’ll end up being wrong and rekt over and over again and, secondly, even if you’re right once, that will go to your head and you’ll blow up very fast. Instead, the key is to be flexible and adapt to what the charts tell you: never forget that what we’re doing is technical analysis, not technical forecasting. When you have a flexible mindset, the market can never put you in tilt and get you to make stupid decisions. Patience, composure and persistence: those are the things that I wish for all of you to maximize in 2023, because once you have those, wealth and success essentially come on their own.