Welcome to the seventh 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.
The holiday period typically isn’t the most exciting in terms of important news and macro developments, and this one is no exception. As we’re getting ready to close this exciting and eventful year, there haven’t been too many big events in the space, and I’d only mention two: initiatives by lawmakers and on-chain metrics. Regulators have been talking about crypto all over the globe, with Russia and Turkey taking very restrictive stances, while the situation in the US is decidedly more optimistic. Cynthia Lummis, one of the most vocal advocates of crypto (which you may remember from her attempts at amending the Infrastructure Bill), recently stated that she wants a comprehensive bill on everything relating to crypto that she’ll present next year. Most traders aren’t huge fans of regulation, but positive (rather than restrictive) regulation is a net positive for the space.
As far as on-chain metrics are concerned, there’s only 1.3 million BTC – just 6.3% of the total supply – currently on exchanges. This is ridiculously bullish, and this trend is showing no sign of stopping anytime soon.
Bitcoin surprised us during the holidays and reclaimed an important level at $48,500 as well as both EMA21 and EMA200 on D1. Many traders were relieved as the “famous” downtrend line, which was shared all across Twitter, was broken.
Currently I will be looking at the $49,000-$53,000 range. Every touch of the range low is a buy, every touch of the range high is a sell until we get further continuation signals. Funding rates aren’t high, which is a good sign that this growth was based largely on spot buying. EMA200 represents a strong level on the daily chart and it is a must hold if we want to see continuation. Currently we are trading right above both EMAs on the daily chart, however after taking a quick look at the weekly chart, you will see that EMA21 has acted as a strong resistance since the crash on Nov 29th.
To sum up, I will be trading the range low to range high and in case we lose $48500 I will place bids at ~$44,500.
Ethereum also reclaimed a very important level at ~$4000, which is a must hold for bullish continuation. EMA21 on daily currently seems like a level too strong to break ETH eth is trading between the EMA21 and EMA89.
But looking at the past ETH movements, we can see that we have entered in the previous $4000-$4450 range, meaning this could potentially be a good long entry with a target at the range high. However, keep in mind that we are stuck between EMAs and the RSI is currently in the overbought zone, which suggests that we will see a reset soon.
Update from previous week on ETH/BTC:
We argued that EMA21 on the daily chart was a strong support, however upon losing it, we immediately dropped to a key weekly breakout level which seems to be holding for now. Losing this level would indicate that this weekly breakout was actually a fakeout, and we can forget our 0.1 btc target for some time.
To sum up, if the key weekly level on ETH/BTC is lost I will start pivoting and focusing on Bitcoin more than on alts. On the USD pair, the $4000 level is a must hold, a close below would indicate a failed breakout and we would look towards $3500.
Blood’s content recap
“Trading is an acquired skill that needs a lot of practice to be profitable.
Rather learn about Defi, staking, and yield farming:
- how early it is & future
- best low/mid/high
- risk yield farms
- useful resources”
While you’re looking at the charts, on-chain metrics etc. in anticipation of the yearly close, don’t forget to take time for the really important things in life, especially during the holiday season. Spend some time with your loved ones – the market isn’t going anywhere.
Everything still looks good in the macro view, if a little undecided in the short term. So, keep taking low-risk and low-stress range trades until we get further confirmations across the board, relax and enjoy the holidays!