Bloodgang,
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.
Love,
Blood
SEC and ETF saga continues, Coinbase files a motion for the court to dismiss the SEC’s lawsuit, Bitcoin stuck at the major level and stocks made a perfect retest.
Fundamental overview
This section might as well be renamed “SEC overview” for the time being, but given the extreme scale of the impact that SEC-related news can have, it’s well worth our time. Besides, it’s way more exciting than trying to decipher the tone of voice that Powell uses when he mentions the word “inflation.”
The past week brought us some exciting developments in the ETF story that we covered in the past couple of issues. On Friday, the SEC said that the current ETF filings are inadequate, causing a near-instant 5% dump on BTC. This reaction was far from surprising, but the reason that the dump was so short-lived is that the headlines were very much exaggerated. As soon as you read into it a bit more than a market-dumping headline-scraping bot, you’ll see that this could even be good news for ETF approval. In fact, all that the SEC said was that the filings need to specify which spot exchange they’ll use for their surveillance-sharing agreements (a standard practice to prevent market manipulation) and provide more details on those agreements themselves. As soon as that’s done, they can refile.
Why is this a good thing? Well, if Gary was hell-bent on denying any spot ETFs, he would try to drag the process out and then reject the applications completely, using similar arguments as before. This time, however, the SEC’s feedback sounds like they’re saying that the applicants just need to fix that one thing and they could potentially get approved. Long story short, this is good news in my opinion, as it’s the first sign that the SEC wants to give serious consideration to this long-awaited financial instrument.
Bitcoin
Bitcoin Weekly
Bitcoin Daily
Bitcoin continues to trade just above the breakout point, with the weekly candle close signaling indecision.
After Bitcoin’s 20% rally, we’ve had a relatively uneventful week, with the price ranging between $30k and $31k. As mentioned last week, $30k is a key level on multiple timeframes (monthly, weekly, and daily), as well as a psychological level, and it won’t be broken easily. Despite the positive price action, trading volume remains lower than in March, meaning that we can quickly see a change in price.
A closer look at the daily shows reveals that recent candle formations indicate reduced trading activity, with small candle bodies and minimal price movement. We’re all waiting on the sidelines, anticipating the next move. On the bright side, all daily EMAs are below the price and are beginning to tilt upwards, which is a bullish sign.
In summary, we’re at a standstill at the previous highs, waiting for a move in either direction. A failed breakout would be bearish, potentially triggering a crash, while a confirmed breakout could push BTC towards the $35k CME gap.
SPX, Gold and DXY
S&P 500
Gold
U.S. Dollar Index
The S&P 500 makes a perfect retest.
Sometimes our chart lines work like magic, and this week the S&P 500 retested the lower high from August 2022, bouncing back by 3%. In my view, this confirms the level, and I expect stocks to continue their uptrend towards the 4630 level, the last lower high before the all-time highs.
The Gold drama continues.
The 1916 level seems to be failing, even after a small bounce last week. I’m glad we recognized gold’s lack of strength at this stage and refrained from entering the market. This stance hasn’t changed, so lower levels are expected. I’m curious to see whether the weekly 100MA will hold as it did in February this year. Regardless, it’s certainly a good place to bid.
Is the DXY rising from the ashes?
We’ve seen two lower highs and just formed a higher low. It’s beginning to look like a triangle formation. The Weekly 100MA seems to be providing solid support for now, but the DXY is nearing the daily resistance at 103.66. Something’s bound to give sooner or later, but the question is, in which direction?
Ethereum
Ethereum Daily
Ethereum has been outperforming Bitcoin over the past few days.
After breaking out of the downtrend channel, it struggled to break the daily resistance at $1,920 and even retested the channel, forming a higher low. At the time of writing, it has broken above the aforementioned level and continues its uptrend towards the $2,000 mark.
We’re also seeing big spikes in volume, which is a good sign, particularly for breakouts. Unless Bitcoin randomly decides to dump, I expect to see Ethereum reach previous highs above $2k this week.
Blood’s content recap
New Scalping Exercise
“Scalping Exercise #9: Ribbon Scalping using MA
1. Open high liquid coin on 5 min
2. Add 4 MAs ( Eg. 7,14,21,28)
3. Wait for MAs to align in a ribbon formation (see picture)
4. Enter in the direction of the ribbon
5. Exit when price reverses
6. SL below/above ribbon
Get it?”
Unlocking the Secrets of Success: Why Most People Fail and How You Can Succeed
“Money = energy
You need to understand people work a whole month for 1-5k. They put most of their month’s energy into work to accumulate 5k.
Imagine you all of a sudden have 500k,1M,5M
A thread”
Concluding notes
Now that we had a bit of a break from the SEC and looked at the charts, it’s time to revisit a related story, as there’s one other development that could be extremely important for the regulatory status of crypto in the US. In its legal battle against the SEC, Coinbase filed a motion for the court to dismiss the SEC’s lawsuit, invoking something called the Major Questions Doctrine and claiming that the whole case lacks a valid legal basis.
This might sound like complicated and boring legal speak, but that couldn’t be further from the truth. Basically, the Major Questions Doctrine states that important and novel issues (i.e. major questions) can only be decided on by Congress, whereas federal agencies, like the SEC, only exist to implement already existing rules. Specifically, Coinbase is claiming that crypto is substantially different from stocks, which is why the SEC’s attempts to regulate it using a legal framework that’s almost a hundred years old are invalid. In applying the Howey Test to crypto tokens, the SEC is stepping outside its jurisdiction and essentially coming up with crypto regulations on its own, which it isn’t allowed to do. Instead, it’s up to Congress to come up with new regulations that are appropriate for blockchain-based assets, and only then will the SEC be able to implement those rules.
The Major Questions Doctrine was upheld by the US Supreme Court in 2022, which is why there’s good reason to think that Coinbase could be successful. If they are, then that means that Gary will have to back off from crypto until Congress decides on how it should be regulated. While that’s still far from the whole battle—there’s still the issue of whether Congress will come up with actually sensible regulations—it’s still far better than Gensler’s all-out war on crypto.
