Welcome to the thirteenth issue 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.
Love,
Blood
Fundamental overview
While the charts definitely do look good – with an amazing weekly close on BTC – there haven’t been any key macro changes since the last newsletter, except for the January jobs report in the US, which showed an increase of 467k in nonfarm payrolls. To put it simply, the US economy is showing unexpected levels of strength in spite of Omicron, which is likely part of the reason why Bitcoin managed to bounce quite a bit. But there is a less positive side of this for equities: with the labor market this strong, it’s likely that the Fed will raise rates more than expected in March, which would likely lead to a dip in stocks that could spill over to crypto.
In other news, AssangeDAO, a DAO (Decentralized Autonomous Organization) set up to raise money for the legal support of WikiLeaks founder Julian Assange, raised almost 12.6k ETH, which is worth close to $40 million. If anything, this shows how much of an impact crypto-native approaches can have in the real world, and we’re likely to see more activists and different global initiatives taking a similar approach. Apart from that, another good factor for crypto adoption is the fact that Ted Cruz put his money where his mouth is and bought some Bitcoin.
Bitcoin
Bitcoin closed above a key weekly support indicating further continuation to the upside.
As argued in the previous newsletter we had to close above the $40,500 level for any kind of continuation, which we finally got. After a strong bounce on February 4th we managed to break above $41k and got a decent weekly close above the range low support on the weekly timeframe.
Historically, February provides the highest monthly returns since 2013, as you can see here. The Weekly RSI slowly started sloping upwards and is making its way to break above the 20 level, whereas on the daily level we are heavily in the overbought area, which could result in a small retrace.
Looking at the daily timeframe we had a retest of the $40,500 zone, which provided a great opportunity to trade this before going further up. If you missed that opportunity I don’t suggest entering now as we are halfway to the first target which is $46,000. I will be placing bids on the support level, in case we retest again before going further up.
Ethereum
Ethereum reclaims important levels, time to ape in?
Ethereum claimed its important levels way before Bitcoin did, indicating it performed better in this downtrend. I suggested focusing on Bitcoin as it was more predictable and easier to trade, however in hindsight, trading eth was a good idea as well. Looking at RSI on the dollar pair as well as ETH/BTC, we can see that both are well in the overbought area which could indicate a short term retrace.
At the time of writing, it is trading at $3060 which is a daily resistance. A confirmation above would confirm a good entry because we have a confluence with the ethereum/bitcoin pair where eth reclaimed a key weekly level. Once we see some strength on the ETH/BTC pair, indicating a bounce from the key level, I will look for a long entry.
Also, the traded volume on OpenSea exceeded $5B in January which definitely impacted the price of ETH and was one of the reasons for its performance during the last month.
Blood’s content recap
Secret tip
#25
“How to add new indicators
Draw out your set-up on a chart and keep going until you used the tool 100s of times.
Now play around with EMA/SMA settings and find one which gives buy/sell signals in confluence with your system on winning trades.
That’s how you find your edge”
Announcing new trading league
“Blood Trading League™ is coming to Discord
Start using custom-made BloodTradingBOT connected with all top tier exchanges and paper trade Your Monthly balance.
For Top 10 Best Monthly traders there will be a Prize pool provided.
Coming in February, ready to test your skills?”
Concluding notes
In an environment like this, with the Fed not yet certain on whether it will go for a “soft landing” with the rate hike or just YOLO nuke equities with a 50 basis point jump, caution is still very much necessary. In other words, don’t go all-in on Bitcoin on a 5-10% green daily candle, but there are still some great opportunities for altcoin plays, as long as you’re strict about when to exit a trade. Remember, when Bitcoin bounces 5%, many alts can bounce 15+%, but this difference is even more pronounced when there’s a correction.
