Beginning of Freedom – Issue #87

We’ve had a big week for crypto with another one coming up, as the Binance saga dominates the headlines more and more. In a surprising turn of events, several key figures at Binance, namely General Counsel Han Ng, Chief Strategy Officer Patrick Hillmann, and Senior Vice President for Compliance Steven Christie all told CZ this week that they were leaving the company. They gave very innocent-sounding (if not too believable) reasons for their departure—including stuff like having a baby and having to do house chores—but the timing is suspicious to say the least. Some have even compared this to Sam Trabucco leaving FTX a couple of months before the blowup, although that seems exaggerated at this point.

What we do know is that Binance is set up for a mammoth legal battle in the US. While having some of their top legal/compliance employees jump ship at this time doesn’t sound good, the exchange has also recently hired some of the best lawyers in the world to prepare for the DoJ (Department of Justice) going after the exchange—something that looks pretty much inevitable now. In any case, this saga will take a very long time to play out and, even though I’m not convinced that we’ll see a catastrophic outcome, I’ll say the same thing that I kept saying before the FTX bankruptcy: putting most of your crypto into cold storage is always a good idea. Exchanges shouldn’t be used as long-term wallets, no matter how much you trust them. 

Oh, and apart from all the headline risk we’ve got right now, there’s also the June CPI to worry about, which will be out on Wednesday. Headline inflation is expected to be at 3.1%, so anything unexpected will likely have consequences for the next Fed meeting.

Bitcoin

Bitcoin Monthly

Bitcoin Daily

Bitcoin remains indecisive; will it print a fake breakout leading back to $26k, or confirm the level and teleport to $34k?

It’s been an exciting week for day traders as Bitcoin hit a new high of $31,500 and then dropped back to the $30k region within a day, confirming the range it has been trading in since mid-June. At the time of writing, Bitcoin is trading slightly above the support level of the range, which is $29,500, with resistance at $31,500.

I’m sure traders have attempted to trade breakouts/breakdowns, but at this point, I don’t recommend trying to trade this choppy price action as it will likely leave you empty-handed. It’s best to stay on the sidelines until we see a clear directional move.

The daily structure remains in an uptrend, and I’ve drawn some zones that seem to be telling a story. After every upward move, we saw a significant retrace (-20%), but on the way up, there was an accumulation zone which is now being extended. Bitcoin pumped around 50% in both green zones, and if the current green zone continues its path to the trendline, it will again print a 50% move after touching the support level of this channel.

However, bear in mind that we could see a fake breakout here and drop back to retest the low at $24,800.

SPX, Gold and DXY

S&P 500

Gold

U.S. Dollar Index

Are stocks printing a swing failure pattern?

Last week, we noted that a perfect retest was made on the 4325 level, confirming a breakout. However, at this point, stocks seem unable to climb further. Regardless, as long as the breakout holds, I’m optimistic and looking for continuation in the crypto markets. We could see stocks range here, at least until we get the CPI numbers for June this week.

Of course, if you’ve been following my tweets, you’ll know that lower numbers are expected due to the Base Effect.

Gold lingers around the 1916 level.

Not much has changed since last week, but the lack of strength at a crucial level should be telling. Seeing weakness at support signals only one thing: a breakdown. The CPI could change that and provide a bounce, but it won’t change Gold’s bearish structure.

The U.S. Dollar Index continues its downward trajectory.

After nearly two weeks of strength, we’re now seeing a retrace of that upward move in a single candle. If the CPI shows lower inflation numbers, we can expect the Fed to sound a bit less hawkish, which will push the DXY further down towards the 101 level, the last level before a big breakdown.

Ethereum

Ethereum/USDT

Ethereum/BTC

Ethereum prints a fake breakout above $1900 – bearish.

Looking at the big picture, we can confidently say that Ethereum is in an uptrend, but it has been unable to gain momentum since April, after making a top at $2140. Bulls will remain optimistic as long as the trendline, which is in confluence with the previous downtrend channel, is defended.

There are lots of support levels here, along with EMAs. However, if Bitcoin prints a failed breakout, nothing will hold it, and the $1665 level will come into play again.

I’m bringing back the Ethereum/Bitcoin chart as we have a confirmed breakdown, which makes the 0.055 BTC level interesting. ETH/BTC has been trading in a downtrend since the Merge back in November 2022, and we were accumulating it at the 0.065 BTC level, which yielded some profits after selling at the 0.077 BTC level.

Now, our focus shifts to the 0.055 level, and the waiting game begins again. This chart is perfect for practicing your patience. Will you survive?

Blood’s content recap

New Scalping Exercise

“Trading Exercise: BloodSwing Indicator

1. Open H4 chart (Bitcoin or Ethereum works best)

2. Add BloodSwing Indicator

3. If the band is green, long every retest

4. If the band is red, short every retest

5. Set TP at 3RR

6. SL set below swing low

Indicator is FREE to use.”

Unlocking the Secrets of Success: Why Most People Fail and How You Can Succeed

“#Bitcoin giving 100% profits since my bottom call tweet in November 2022.

The average entry was below $18000.

First macro target at $35k.

Sometimes I feel making money this easily should be illegal.”

Concluding notes

As if the Binance drama wasn’t enough, there are also some fresh developments with DCG (Digital Currency Group). On Friday, Gemini filed a lawsuit against DCG and Barry Silbert, alleging that he systematically committed fraud against Genesis creditors (Genesis being part of DCG). The thing is, Gemini had an Earn program through which its users could lend money to Genesis. Following the 3AC collapse, it gradually became clear that Genesis is, to put it mildly, completely screwed, which means that 232,000 Earn users have over $1.2 billion trapped there. As Barry wasn’t exactly helpful in negotiating a deal, preferring instead to buy time and try to raise capital, we’ll now see this play out in the courtroom.

Genesis is an old story, of course, but it only serves to further underline the importance of cold storage and capital preservation. Not too long ago, everyone thought that FTX was perfectly safe, 3AC was the ideal money-making machine, 20% APY on UST was sustainable, etc. Whether it’s FTX maxis or people that thought they’ll be able to retire on passive income from UST, these stories all teach us the same lesson: avoid single points of failure. In fact, that’s precisely the guiding idea on which Bitcoin was first built, and it’s also the single most important thing to keep in mind if you want to make it in this exciting but dangerous world.