Welcome to the thirty fifthissue 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.
Last week, the S&P 500 started with a bit of a dump but then managed to maintain a slow grind upwards, while the dollar index just keeps mooning – so much so that the euro is close to being 1:1 with the dollar for the first time since 2002. Apart from being a neat trick – just denominate your portfolio tracker in EUR and you’ll feel much better about the past year – this reveals growing uncertainty about Europe’s energy supply. If this persists as winter draws closer, the pressure on the euro will only get worse.
Meanwhile in US equities, the biggest news was Elon Musk stating that he’ll withdraw from the $44 billion deal to buy Twitter. Apparently, he wasn’t satisfied with Twitter’s failure to provide data on the number of bots on the platform, but the Twitter board will still seek to force the deal through. As you’d expect, Twitter shares dumped, and it looks like we’ll see a drawn-out court battle over the deal. Still, it will be a drawn-out court battle that includes Elon Musk, so at least it will probably be entertaining.
Bitcoin/Dollar Monthly chart
Bitcoin/Dollar Weekly chart
Bitcoin still trading between the MA200 and 2017 ATH.
After an eventful week, Bitcoin provided a 17% bounce only to get rejected by the MA200 once again. Traders that were buying the $19k level consistently should derisk upon MA200 touches as that is the main resistance for now. Closing above that level could result in a quick pump to the $28k-$30k zone.
But as the books say, the more time we test a level, the sooner it will break, so i am keeping my eyes both on the MA which if broken there will be a good long opportunity and on the 2017 ATH, which if broken it will provide a good short opportunity. The target for shorts can be seen on the monthly timeframe and it lies at $13k. Nothing much has changed on the monthly, bitcoin is currently stuck in the middle of two key levels which are $36500 and $13000. Both of these levels should be monitored as we get close to them and your positioning should adjust appropriately.
The Stoch RSI hasn’t changed – both on the monthly and weekly timeframe we can see that we are in the oversold area. At the moment, the weekly RSI is showing some interest in order to break out of the oversold area, but let’s wait and see what this week brings us.
Ethereum/Dollar Weekly chart
Ethereum/Bitcoin Weekly chart
Ethereum also fights the weekly MA200.
Similar to Bitcoin, ETH also tried to break above the weekly moving average however it had more success with it as it pushed 3 weekly wicks above which still ended with a close below. I also started observing a level at $1075 which I am unsure if it’s relevant, but so far there were no weekly closes below that level. I will keep monitoring both these levels as upon breaking one of them a strong signal will print. Keep in mind that we need a weekly close below/above any of the above mentioned levels, so don’t be aggressive and get trapped in a wick.
The ETH/BTC chart proves again that the 0.059 BTC level is important and will need more strength from the bulls in order to break above. The Stoch RSI is right on the 20 level where we are looking for something to happen. Either it will get rejected and drag ethereum down or break above and help it test the resistance again. As long as the level is not broken I am not looking to swap any more BTC to ETH. Each time a level is tagged I sell some ETH for BTC, looking to re-enter as the level is broken.
Blood’s content recap
“Q2 earnings are coming out.
Waiting to see how f*cked companies were during the macro uncertainty.
If the reports are bad, S&P500 is taking a hit and crypto will follow.
Don’t forget $DXY, as long as it keeps mooning, crypto isn’t going higher.
With all the crypto news recently – like Three Arrows Capital’s Su Zhu and Kyle disappearing – it’s easy to forget that this is still very much a Fed-driven market. The CPI for June will be published on Wednesday, and this will be an extremely important datapoint for where US equities (and, as a consequence, crypto) will go next. Most are expecting inflation to be even higher, with a CPI estimate of 8.8%, so if it ends up being worse than even this estimate, I expect the reaction to be drastic.
On the other hand, CPI at 8.7% or 8.8% probably won’t have a meaningful directional impact, while anything lower than that would be great news for equities. Whichever way this goes, make sure to keep away from any leverage around the announcement.