The Bull Walk
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Cheat Sheet -
Support and resistance levels and our daily, weekly and monthly bias on BTC, GOLD, 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
Crypto News
Tornado Cash governance rejects plan to diversify treasury holdings (The Block)
Nexo to potentially acquire troubled crypto lender Vauld (The Block)
UK regulator appoints new digital assets director to oversee crypto (The Block)
EToro SPAC Deal for Public Listing Canceled (CoinDesk)
3AC Paper Trail Leads to Trading Desk Obscured Via Offshore Entities (CoinDesk)
UK Government Seeks Views on DeFi Taxation (CoinDesk)
Lamborghini-backed GT racing team to authenticate car parts using NFTs (CoinTelegraph)
Indian Crypto Trading Volumes Plunge as New Tax Rules Kick In (Blockworks)
Singapore Mulls Limits on Retail Traders, Leverage (Blockworks)
Lido Token Jumps 24% as Staked Ethereum Slowly Repegs (Decrypt)
BTC Outlook
Bitcoin’s price continues to consolidate between $19k and $20k as most of crypto twitter is calling for “The Next Leg Down”. It’s likely that we are just back to big round numbers trading. With uncertainty around centralized exchanges being on the verge of liquidations, miner capitulation, and central bank policy, bulls are having a hard time creating any kind of rally in the price. The bears are having trouble too though. They have all the ammunition needed to convince others that now is the time to sell and BTC will be heading into the mid $10ks or even lower.
However, we still believe price tells the story better than the news. Bitcoin will be stuck between $19k and $20k until it isn’t. So, the safe way to play it is trade the range, long $19k short $20k or wait for a breakout and then follow the momentum. If $19k breaks short it until new consolidation forms and if it rallies above $20k get long looking for a retest of $23k-$25k.
If you find the need to participate here it is prudent to trade with smaller size and with considerably tight stop losses due to the amount of volatility and uncertainty in the market.
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Possible Course of Action
Long spot here with multi-year timeline
Do nothing and wait for breakout or breakdown
Trade the range: short near $20k, long $19k
The Bulls’ Defense:
Holding $19,000 as support (big round number)
The Bears’ Prosecution:
Global macro uncertainty
Tech stock correlation
ETH Outlook
We took this trade and got long ETH last Thursday based on our own call.
What a beautiful swing it was. We closed this long early this morning. So, what’s next? Probably a swing back down to retest the bottom of the wedge. Of course, anything can happen so if you decide to short here then tight stops could save you a lot of pain. If the ETH/BTC ratio rises above this resistance near 0.58 and then holds it as support than that would be the sign a local bottom is in and we’d expect a retest of 0.07.
Alternatively, the wedge continues to fill out and ETH/BTC swings back down to 0.052 or even testing the June lows. Same advice as above, trade small, be prudent, don’t hold onto losing positions.
Possible Course of Action
Caution here as ETH is highly correlated with the tech stock sell off
Wait for BTC to rise above 50-day MA before long ETH
Long if price breaks above the top of this wedge and holds as support
Short here looking for a swing trade back to the bottom of the wedge
The Bulls’ Defense:
EIP-1559 has burned $2,792,186,613 (2,512,608 ETH) so far. Supply constraints should continue to have a positive impact on price.
ETH 2.0 launch
The Bears’ Prosecution:
EIP-1559 ETH burn has slowed down due to low network usage
Global macro uncertainty
Nasdaq correlation and sell off
ETH/BTC pair continues to be weak
Want more from Foot Guns? Subscribe to become a premium member and get more podcasts, more updates and access to our private channels in discord were we actively discuss trade ideas.