Beginning of Freedom – Issue #89

The next FOMC meeting is starting tomorrow, while the all-important interest rate decision will be announced Wednesday. Unlike the previous meeting, when we had a pause, pretty much everyone is expecting a 25 bps hike this week. This expectation, along with UK CPI coming in well below estimates, helped the US dollar bounce to an important level (more on this below), which, as you might expect, isn’t good news for risk-on assets. In spite of that, stocks didn’t really seem to take much of a hit, with most indices still on their way to all-time highs (especially the Dow index, which closed the week more than 2% up), and everyone and their grandma pivoting to AI to pump their shares.

Speaking of stocks, it’s worth mentioning that Coinbase is outperforming most things lately, with its shares currently up almost 180% since the start of the year, making Bitcoin’s 80% YTD look weak in comparison. I mentioned COIN back in issue 67 in February, commenting on its impressive recovery, and it’s up another 60% since then. This isn’t to say that the current parabolic move offers a good buy, but if you want to dabble in TradFi, it could be a good idea to chart some key levels and wait for an entry. COIN is definitely one of the riskier equity plays you can make: if its battle against the SEC goes well and it also starts turning a profit, it will run hard, but if that doesn’t happen and Gary (at least temporarily) gains the upper hand, then it can dump faster than most things not named after a cute animal.

If you saw this chart with no context (and without seeing the gaps), knowing that one is a proverbially volatile crypto asset and the other is a stock, which would you think is which?

Bitcoin

Bitcoin Weekly

Bitcoin Daily

Bitcoin weekly is slowly bleeding towards the $29,500 support level.

Structurally, this looks like another failed breakout. The $30,000 level is proving to be stronger than anticipated, but considering the recent regulatory crusade on crypto, I would say that we’re holding up well. As long as the higher low at $24,500 is defended, we remain in an uptrend. The weekly MA 100 seems too tough to break for now, but once we do, I expect a full send towards $40k.

Delving deeper into the daily timeframe, we’re still in the accumulation zone before the presumed next leg up. The rule of thumb is: the longer the accumulation, the larger the move in either direction. So, we’re either in for a significant breakdown or a huge pump. With the FOMC meeting this week, we could see some short-term upside if the Fed happens to pause (although that’s highly unlikely and a 25 bps hike is priced in).

Bear in mind, this is the worst market to trade for most types of traders out there. Not much is happening, so instead of trying to force any trades, focus on education and learn things that will be useful in the upcoming bull run.

SPX, Gold and DXY

S&P 500

Gold

U.S. Dollar Index

Stocks are slowly moving higher.

More specifically, SPX is just 6% away from breaking all-time highs, in stark contrast to Bitcoin, which needs over 130% to break its ATH. Some analysts are warning that a fakeout could occur at the SPX ATH, resulting in a massive crash afterwards. However, almost none of those analysts predicted this great performance of stocks so far, so my advice is to trade based on levels, rejections, and chart patterns, not on what some analysts say.

Gold bounces from the 1916 level.

It continues its downtrend, and structurally, nothing has changed, except for a support level being defended and a resistance level tested and quickly rejected. A higher low is likely to be printed unless bullish news from the Fed gives gold the strength to break the 1981 level.

U.S. Dollar Index

The breakdown nearly reached the range at 89-99.2 before bouncing right back to the key 101 level. The DXY will be influenced by the Fed’s decision, just like gold and stocks, but this should move in the opposite direction. An interesting week lies ahead.

Ethereum

Ethereum/USDT

Ethereum tested the resistance slightly above $2000, but was immediately rejected.

Both Bitcoin and Ethereum appear to be stuck at psychological levels, $30k for Bitcoin and $2k for Ethereum. A break above these levels and confirmation on the weekly chart would be considered bullish.

At the time of writing, we are currently trading below the $1930 level, which is considered bearish, and we can expect the trendline to be tested again. Volumes are low across the board, and Ethereum is no exception.

Ethereum’s weekly level is at the $1930 mark, and it failed to close above it, which makes the next weekly level at $1700 interesting.

Blood’s content recap

Beginner trader Dilemma

“1. Joins the industry

2. Studies charting

3. Draws 20 lines on a chart

4. Price drops to his line, panics and doesnt buy

Stop and Do This Instead

– Open BTC Daily

– Draw a range

– Buy support, sell resistance

– Journal Everything

You will Learn faster”

This is my last Bull Run

“This could very well be the last Bull run before regulation ruins the beauty of crypto.

My plan is to ride this bull until 2025 and start slowly moving out.

This means, now is the time to grind and make the most of it.

I’m serious.”

Concluding notes

While most of Crypto Twitter—or “Crypto X” I suppose, since Elon is really hell-bent on renaming his app to make it sound more like an adult video website—is busy obsessing over animal racing of all things, don’t forget that Bitcoin’s volatility is at historically low levels. More specifically, the weekly Bollinger Bands, which reflect volatility (the wider they are, the more volatile the price) are at their tightest ever. The reason why this is worth mentioning—and repeating—is that a lot of traders get rekt in conditions like these. For example, let’s say you’ve got a position in an alt where you didn’t set an automatic stop loss, because you’re afraid of getting stopped out by a scam wick and want to monitor the position actively. Maybe your position is slowly grinding upwards and you’re extra relaxed because of it, especially since Bitcoin doesn’t seem to be doing anything troubling (or anything at all). That, however, is precisely the most dangerous environment to be in. Volatility this low is bound to resolve soon, so if the BTC move catches you off guard, you and your alt will be underwater sooner than you can say “liquidation email.”

Finally, there’s one thing to mention that is more in the realm of pure speculation, but interesting nonetheless. SBF was recently spotted in New York, around the same time that the SDNY (Southern District of New York) made some new filings in the old Tether case. Now SBF is someone that the courts will really want to make an example of, so if he’s collaborating to get a more lenient sentence, then whatever info he’s giving them must be really huge. I don’t think it makes sense to go any further in baseless speculation on what that could be, but it’s definitely worth bearing this in mind as one more reason to prioritize capital preservation if things do get bad.