The Little Coin That Couldn't
Bitcoin fails to hold a breakout rally, again!
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Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, ETH, OIL, ES, and NQ as well as our favorite altcoins.
What We Are Watching
We further breakdown our case for these cryptos here : What We Are Watching
Luna’s out! It was a wild ride, but the damage is to severe for a comeback. We’ll bring you another lovely crypto soon. Before we do, please respond or comment with any tokens you’d like to see us tracking.
Crypto News
BIS Economists Contend Crypto Can't Fulfill the Role of Money (CoinDesk)
US Senators Introduce Crypto Bill Outlining Plan for Future Rules (CoinDesk)
200 ETH Worth of NFTs Stolen From Yuga Labs Discord Server Hack (CoinDesk)
Staked Ether Discount After Terra Collapse a Sign of Liquidity Crunch (CoinDesk)
IRA Financial Trust to sue Gemini over $36M exploit in February (CoinTelegraph)
MetaBrewSociety to offer voting rights over a brewery via NFTs and DAO (CoinTelegraph)
OnlyFans founder launches celebrity trading card platform (CoinTelegraph)
Bitwise, Multicoin Capital Spin Up Metaverse Index and Fund (Blockworks)
Among Affluent Asian Investors, 52% Hold Crypto (Blockworks)
Binance Under SEC Investigation Over its 2017 ICO Listing (Blockworks)
NBA Player Spencer Dinwiddie’s Crypto App Calaxy Raises $26M (Decrypt)
The Sandbox Publisher Animoca Brands’ Reports $5B in Crypto, Cash Reserves (Decrypt)
BTC Outlook
Bitcoin’s price action has been brutal for the past few weeks. Any relief rallies are met with rapid pull backs that give up days worth of gains in a few hours. There’s really only three things going on: Bitcoin is consolidating in a range, it’s breaking up or it’s breaking down. We’ve noticed that with a high probability of success that once Bitcoin breaks down or up in a rapid manner, which creates what looks like a vertical line on lower time frames, and then consolidates in a tight range sideways, it almost always throws back the other direction in a similar magnitude. This is the Bart Simpson pattern we spend so much time talking about during this bear market. Why? Because it works. A few of our premium members have had successful trades following these patterns recently.
So, yesterday’s price rise followed by rapid sell off was a Bart and now it looks like an inverse Bart is forming. How do you trade it? Buy the bottom of this consolidation range with tight stop losses. There’s a small CME gap at $28.5k so that seems like a good place for a stop and entries between the current price and there. Confirmation would be a rapid rise in price breaking the highs of this range around $29,750. While you could set your stop as low as $28.5k, losing $29.2k would be where I will be putting my stop.
You can also join our discord where we discuss active and potential trades.
Possible Course of Action
Long under $30k expecting to fill the CME gap at $36k, stop loss near $28.5k
Do nothing and wait for current breakdown to consolidate
Short here looking for a retest of $28.5k
The Bulls’ Defense:
Inverse Bart
The Bears’ Prosecution:
Global macro uncertainty
Tech stock correlation
Unable to hold two breakout rallies
ETH Outlook
Many are watching this 0.055 level for the ETH/BTC ratio and aside from this morning where ETH is making an attempt to rally back against BTC. It would be odd for the ETH/BTC ratio to not retest 0.055 just because so many people are watching that level. If 0.055 holds expect a fight between the bulls and bears at that level and if the price just blows through 0.055 then ETH could go much, much lower against BTC. Of course a short term rally in the Nasdaq could bring ETH back up with it. Certainly, the ETH/BTC ratio continuing to fall is a warning sign for altcoins. If ETH is not rallying against BTC it is unlikely that an altcoin will rally against it. There are always exceptions of course.
We will continue to monitor the ETH/BTC ratio closely as once there are signs of a turn around that could be a great buying opportunity.
Possible Course of Action
Caution here as ETH is highly correlated with the tech stock sell off
Wait for 0.055 to hold as support
Short ETH/ long BTC might work
The Bulls’ Defense:
EIP-1559 has burned $4,254,104,295 (2,413,318 ETH) so far. Supply constraints should continue to have a positive impact on price.
The Bears’ Prosecution:
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
Were you surprised that yesterday’s rally sold off in the evening? Everyday in our Premium Discord we're discussing what to do in this bear market. Hal and other Premium members identified a potential sell off last night in our premium discord. This price action is wild. Join us now so we can navigate this shit storm together.
XPRT
Hi! What about AVAX or Algorand?