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 stuck under monthly resistance, Ethereum makes a move, U.S. GPD beats expectation, preparations for FOMC next wednesday and more
In the face of growing geopolitical uncertainty and gloomy sentiment about the U.S. economy, bond yields managed to take at least a temporary pause in their moon mission last week due to some better-than-expected data. The U.S. GDP and Amazon earnings both beat expectations by a lot; while it might seem strange to reference those two releases together, I think it does make sense due to the fact that Amazon is a very good reflection of how the average U.S. consumer is doing in general.
That said, the market still isn’t done flocking to safe havens, as it’s easy too see from the performance of gold and, at least in part, Bitcoin. Normally, it would be U.S. bonds that anxious investors would be buying in times like these, but with the prospect of the U.S. having to fund yet another war (along with developments with BRICS countries that I’ve been mentioning since the start of the war in Ukraine), it’s hard to imagine there being that many willing buyers here.
When it comes to more short-term developments that will be important for TradFi as well as crypto, don’t forget that the next FOMC is on Wednesday. Many are expecting a pause here, but given strong economic data and the fact that another hike this year wouldn’t be unexpected, don’t be surprised if we get another 25 bps hike.
Bitcoin is stuck under the monthly and weekly resistance.
We have a monthly candle close in less than 2 days now, so an ideal bullish scenario would be for Bitcoin to break out and get a monthly close above the $35k-$36k level. The bearish scenario is a rejection at the current level and a drop back to $30k.
Accumulation below resistance is considered bullish as traders take a breather before next leg up, however the volume is dropping sharply, so this should be an exciting week. Given that this pump was driven mostly on spot ETF speculation, we might see some traders take profit and close positions here.
Chasing the pump here is not a smart idea since BTC is up almost 30% in the last two weeks. If you missed this leg up, it might be smart to time your entry and carefully have an invalidation, since there might not be any major developments in the ETF space until Q1 2024.
The daily timeframe shows that we have formed a range below the monthly resistance with the range low being at ~$33,400 and range high at ~$35,500. Losing the range low would be the first sign of weakness and a signal that a retrace is in progress, while breaking $35,500 would be the first sign of strength and further continuation.
SPX, Gold and DXY
U.S. Dollar Index
Stocks break the swing low.
Another bloody week for stocks as the SPX breaks the swing low and tests the weekly support level at 4096 for the first time since April 2023. As mentioned previous week, nothing says bullish about this price action. A lower high was printed in the macro picture with no sign of strength recently while crypto is taking off.
The question now is whether crypto is lagging behind and will print the same pattern or if Bitcoin has decoupled from stocks. The 4096 level is the last lower high level from the 2022 bear market which must hold.
Gold breaks the 1981 level.
It continues to show strength and has similar price action to Bitcoin. The real test will be this week, as bulls will want to see the weekly candle close above the level or we will consider this a fakeout and the infamous 1916 level will come back into play.
The U.S. Dollar Index is showing strength again
After printing a new low it bounced and broke above the daily trendline. It will be interesting to see this week whether the breakout is confirmed or if there will be a new low formed here and possibly a test of the 105 level.
There are interesting financial events in US this week which will definitely affect DXY, so keep your eyes on this chart.
Ethereum/Dollar is following Bitcoin’s strength and breaks above the trendline as well as the $1768 level.
A strong weekly candle led to ETH breaking key levels and gave hope to bulls. Similarly to gold, bulls will want to see a weekly candle close above these levels or else this will be considered a fakeout. Volume is increasing which is exactly what you want to see after a breakout happened.
However, I am still confident that if Bitcoin retraces at the resistance, these levels won’t hold and a fakeout will be printed.
Ethereum/BTC is a different story and confirms my predictions for the USD pair.
It has not managed to reclaim the 0.055 BTC level and continues to underperform against Bitcoin. The only hope for bulls this week is that it reclaims the level or at least defends the wick that lies below 0.05 BTC.
I have bought some ETH at this level, but I moved the rest of my bids down to 0.043 BTC. If Bitcoin retraces here, ETH will dump harder and the 0.043 level might be reached.
Blood’s content recap
2021 traders, you are in Luck
“Bear Market PTSD will make most traders miss these pumps.
It will take them a long time to flip bias and look for Longs instead of Shorts.
Traders that entered the market early 2021 will recognize trend shifts as similar patterns occurred before Bull Run.”
Books are almost ready
“The book for your early retirement is in a production.
Like promised, for my X community the book will be Free.”
With all eyes on geopolitics and bond yields, there’s not that much happening in crypto apart from the Sam Bankman-Fried trial. On that note, Sam’s own testimony so far hasn’t been the bombshell that some were hoping for. Instead of deciding to take down as many people down with him as possible and dropping unexpected accusations, Sam is pretty much just sticking to the same defense that everyone was expecting: namely that his lawyers made him do it. Apparently, he expects the jury will believe that he was competent enough to make billions in a fast-paced industry while also not being competent enough to realize that playing around with customer funds might not be completely legal.
All in all, apart from the occasional meme-worthy or just plain hilarious moment of the trial, you’re better off keeping an eye on the market to see which narratives in crypto are emerging next. After a long period of next to nothing going on, we’re finally seeing signs of life after BTC made its move.