Welcome to the 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.
Well, the previous few weeks have been boring, but this one was much more interesting. A lot of stuff has been happening, from PayPal exploring the launch of a stablecoin to Kazakhstan’s government resigning. Starting with the positive side, PayPal and other companies – think of the N26 online bank, or many bigger banks across Europe specifically – starting to get more into crypto is definitely insanely good in the long run. Yes, BTC doesn’t look great at the moment, but millions of new people that get access to crypto will most likely actually do something with that access, and we’ll see the impact of that in the coming months.
Looking at the less positive news, the unrest in Kazakhstan caused Bitcoin’s hashrate to tumble 13.4%, given that the country had a significant share in mining. This could be part of what caused Bitcoin sentiment to tumble as well, but it definitely is a short-term effect. Mining is profitable, and however the political situation unfolds, either the government will eventually accept it or miners will simply take their mining rigs somewhere else.
Bitcoin/Dollar Weekly chart
Bitcoin/Dollar Daily chart
Bitcoin is trading at $41406 at the time of writing and has approached the key weekly level as expected. Usually when a strong key level is rejected ($63000) we can expect that we will slowly approach the other side, and we did. The current level was also a key level back in May when Bitcoin plummeted to 30k. We were trading in a range for over a month and the current level (~$40000) was a range high, which was rejected multiple times as well as retested in late September.
Both Bitcoin daily and weekly RSI are in the oversold zone which is a good indication that we should see a relief bounce near current levels. If you stayed on the sidelines for now as Bitcoin moved in between the $39000-$6000 range, you should now think about laying some bids around the $39000 level.
In order to get some bullish action we would first need to reclaim the $48000 level and get some kind of V shaped reversal. If bulls do not manage to defend current levels, and bitcoin drops below the $39000 level, then we look towards $30k.
Ethereum/Dollar Daily chart
Ethereum/Bitcoin Daily chart
Ethereum is trading at $3091 at the time of writing and it’s obvious that the support that we talked about in the previous newsletter ($3600) did not hold for long. Similar to Bitcoin, ETH is also trading right above the range that was formed after the May crash. It’s important to mention that this level ($2950-$3070) is also a high timeframe support. The previous range high would see like a good long entry but I would not hurry with entering any trades other than Bitcoin. Once a clear bounce/reversal is seen on Bitcoin, then we can seek for entries on strong alts.
Ethereum has lost an important level compared to Bitcoin as the weekly breakout, which was broken on Nov. 30th 2021, was now broken. The only level worth mentioning now is the 0.07 level, which is a must hold for ETH. Lastly, similar to Bitcoin, Eth’s RSI is also deep in the overbought zone.
Blood’s content recap
“Beat the market Trap!
Set-ups and trading styles don’t matter. Market makers will always try to trap retail.
For the falling wedge, retail panic sells the moment the textbook pattern is not followed. They over-manage the trade and ignore supports.
Typically I enter there.”
Secret Tip #21
“The biggest question traders face is when should you sell?
The truth is, you won’t be rich unless you take profits.
Master getting paid:
-How should you sell
-When should you sell
Overall, the bearish action over the past week doesn’t look like some global macro shift, but rather a very understandable reaction to the drop in hashrate and a sell-off in stocks following some more bearish Fed news. That said, don’t try to knife catch on alts before you know what the BTC situation is like. If BTC does bounce soon, then yes, alts are likely to bounce even harder, but if it drops lower, that will be magnified on alt/USD pairs, along with a drop in alt/BTC pairs. As always, take it level by level and don’t get rekt!