Welcome to this week’s 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.
Bitcoin crosses $30k, Ethereum laggs, stocks are having a tough time and what did we learn from ETF fake news?
It’s been a while since the last time that a piece of fake news managed to wreak havoc in crypto, but last Monday didn’t disappoint. As you’re probably aware, the giant October 16 wick on BTC—which has luckily been more than filled in the meantime—was caused by a Cointelegraph tweet that the SEC approved BlackRock’s spot ETF. The ‘news’ was soon revealed to be false, but not before BTC pumped by almost 10%, leaving shorts rekt and then retracing and shaking off everyone who longed the news.
It’s far from clear who is ultimately responsible for the fake post, but it’s easy to see why someone would have an incentive to do that, since it would be a very simple way to make a lot of money. Unfortunately, the people who will gain the most from this fiasco are the opponents of crypto among regulators and politicians. Now they can say that Bitcoin is easily manipulated, although it should be obvious that this has nothing to do with crypto as such, but only with the security practices of a single media company. In other words, if Bloomberg posted fake news about Tesla, that would also pump the stock.
In any case, what the pump and dump showed us is that the ETF is far from being already priced in. If a fake tweet managed to do what it did, then imagine what happens when the real news drops, especially with Bitcoin dominance being at its highest levels in two and a half years.
A highly volatile Monday morning takes Bitcoin back to the highs under $31,000.
At the time of writing BTC is trading right at the weekly resistance after it printed a 10% green weekly candle. Whether the reason behind the pump is speculation on a spot ETF being accepted or something else, it doesn’t matter for the chart. We are trading at macro resistance and caution is warranted here.
To be on the safe side I suggest waiting for another weekly close before going full bulltard. A weekly close above $32,000 will quickly result in BTC reaching the weekly resistance and CME gap at $36k.
The daily timeframe paints a clearer picture. The recent pump brought us back into the July range and the ~$29,800 range low needs to be defended if a retrace happens. Breaking the range low will lead us back to the breakout area at $28,123, which, as you can see, was an important level on the way up.
SPX, Gold and DXY
U.S. Dollar Index
Stocks are not having a great time.
Once again, SPX lost the 4300 level after reclaiming it for a few days. Moreover, the trendline was lost without any struggle. Another lower high printed and we are back to the swing low. Nothing about this chart says “bullish”, meaning lower levels are expected here. The decoupling of stocks and crypto is happening, the only thing that interests me now is how crypto will react after US markets open today.
Gold takes a breather
Gold stopped at the $1981 resistance and printed a red daily candle, which again shows the importance of the level. The level was already a reversal point for Gold back in July-August, so I’m keen to see how it reacts this time. A series of lower highs were broken so a retrace was expected sooner or later. Dropping back to $1916 wouldn’t be surprising, but that is a must-hold zone in order to see continuation.
The U.S. Dollar Index prints a lower high
DXY has been cooling off and crypto has been pumping, which again shows the correlation between those two. I keep mentioning that relationship, but it should be clear why it’s important; whether you’re trying to see when crypto is likely to pump or when it could nuke, DXY is something to keep an eye on.
Also, there is no FOMC meeting until November 1, so there is a decent window of time for crypto to pump without worrying about rate decisions, while DXY has to defend the 105 level or it will drop heavily.
Ethereum is lagging behind.
It is not surprising that Ether is not reacting well to the recent Bitcoin pump, given that all eyes are now on the orange coin, which we can see in the dominance numbers as well as the media headlines. However, keep in mind that in every bull run, it’s Bitcoin that makes a move first, ETH follows and then other alts come along for the party. Anyway, ETH still hasn’t managed to break the last lower high, which makes it uninteresting for now.
The trendline is the first target to break above, which is also close to the weekly $1768 level. As soon as the level is reclaimed we can once again look towards $2000. Volume is slowly increasing, which at least makes this interesting to monitor.
Time to bring back the old ETH/BTC chart.
I stopped updating this chart since there was not much to talk about here. The long lasting 0.065 BTC level was lost a while ago and we have dropped down to 0.055 BTC which in my opinion is a great place to bid some, especially if that wick is reached.
I will update levels in case that wick is lost, but until then I’m sticking to my plan.
Blood’s content recap
“The inevitable future of traders that joined in 2020.
Most will bet on coins that made them wealth in previous Bull.
Coins that will make you wealth in this bull do not even exist yet, or were created during this Bear.
I made a lot of money in 2018 with $NEO but didn’t buy in 2020.
Don’t marry your Bags.
A simple strategy
“Wanna know a Simple strategy that helped me stay focused and achieve my goals?
I wrote down my Goals on a piece of paper and put it on the wall next to PC. Short term goals, long term goals.
Actually, write it down on a piece of paper, not in your phone or computer.
You might think it’s stupid, but it makes a huge difference!”
Whenever there’s anything bad going on, you can bet that Elizabeth Warren and other anti-crypto crusaders will find a way to use it for their own political aims. This time, predictably enough, it’s about crypto being used to “fund terrorism,” with a campaign that aims to scare the public by throwing around big numbers that are about as justified as SBF’s legal defense.
More interesting than their desperate attempt to smear crypto is the fact that Bitcoin is performing incredibly well in an environment where risk-on assets shouldn’t be doing great. Geopolitical risk is off the charts, stocks are shaky to say the least, and bonds are getting absolutely slaughtered as there’s simply no one left to buy them, especially with the prospect of the U.S. having to fund yet more wars. And yet, if BTC stays where it is until the end of the week, it will have its highest weekly close since May 2022.
It’s been a while since the famous ‘decoupling’ narrative was relevant, and it’s been even longer since the last time the decoupling was happening in a favorable direction for Bitcoin. Now, with TradFi and the global balance of power both looking ready to burst at the seams, it looks like it could be Bitcoin’s time to shine.