Bitcoin: What is going on?
Bitcoin dropped massively over the weekend as well as the whole crypto market. The main question is whether we are frontrunning the stock market (US indexes mainly) ahead of the FOMC or are we trailing the stock market? The latter means we are following the S&P500 instead of frontrunning it.
The correlation with the SPX (S&P500) and the Nasdaq is the strongest for Bitcoin and we can clearly see that both indexes dumped hard on Friday after a small relief rally. In the long term there's definitely more pain to come but for the coming week this remains the question. Sure, we we have the Fed meeting (FOMC) this week on Tuesday and Wednesday and the Fed will announce yet another rate hike but how much of that hike is already priced in? This remains the question. Also, the Fed started unwinding their balance sheet, selling bonds instead of buying them - simply said: they are draining money from the market by making loans more expensive and selling bonds.
The effect is clear, stock indexes across the globe are hit hard and the crypto is no exception for that. For BTC we still did not fill the whole point of imbalance and right now we should wait to see how the week opens and how the FOMC news will be digested by the markets. Don't try to catch a falling knife! Yet, I did bought my first altcoin already - being the first DCA purchase - so if it drops lower, I will buy more, if it goes higher, I profit. Both scenarios are good and in that way I cover any risk. If you wanna know more about how I approach this market with a long term scope or want to know about my 'composite trading strategy' you can visit the links in my signature field for further information. I'm working on a series that teaches everything you need to know how to trade, mainly focusing at what data you need to look at with regards to market makers, stock market and price action. The series of articles starts at a beginner level and is explained in a simple way, even a child of 10 can understand it. From there on we progress to expert level within a few posts. The first one is up now, so you can start there if you like - I also share all my investments in my newsletter - why I buy, how I buy and how long I hold.
Right now, Bitcoin is revisiting the swing low area and the point of interest that has been drawn out on my chart for many weeks now. Me and my community were waiting for this to happen and no one got fooled to buy a local top or to go long at the wrong moment. We did make some trades (on Twitter) and we're successful but only scalps (short term trades). Tonight we will be looking at the weekly open to see where we stand.
There are amazing opportunities in the crypto market now, you just need to be clear headed and have basic understanding of what is going on to not panic or get dragged into any hype. Remember, trading is not about drawing some trend lines or patterns, its far complex than that - basic technical analysis is not enough to make you profitable, you need the right data. Links below for further info.
The correlation with the SPX (S&P500) and the Nasdaq is the strongest for Bitcoin and we can clearly see that both indexes dumped hard on Friday after a small relief rally. In the long term there's definitely more pain to come but for the coming week this remains the question. Sure, we we have the Fed meeting (FOMC) this week on Tuesday and Wednesday and the Fed will announce yet another rate hike but how much of that hike is already priced in? This remains the question. Also, the Fed started unwinding their balance sheet, selling bonds instead of buying them - simply said: they are draining money from the market by making loans more expensive and selling bonds.
The effect is clear, stock indexes across the globe are hit hard and the crypto is no exception for that. For BTC we still did not fill the whole point of imbalance and right now we should wait to see how the week opens and how the FOMC news will be digested by the markets. Don't try to catch a falling knife! Yet, I did bought my first altcoin already - being the first DCA purchase - so if it drops lower, I will buy more, if it goes higher, I profit. Both scenarios are good and in that way I cover any risk. If you wanna know more about how I approach this market with a long term scope or want to know about my 'composite trading strategy' you can visit the links in my signature field for further information. I'm working on a series that teaches everything you need to know how to trade, mainly focusing at what data you need to look at with regards to market makers, stock market and price action. The series of articles starts at a beginner level and is explained in a simple way, even a child of 10 can understand it. From there on we progress to expert level within a few posts. The first one is up now, so you can start there if you like - I also share all my investments in my newsletter - why I buy, how I buy and how long I hold.
Right now, Bitcoin is revisiting the swing low area and the point of interest that has been drawn out on my chart for many weeks now. Me and my community were waiting for this to happen and no one got fooled to buy a local top or to go long at the wrong moment. We did make some trades (on Twitter) and we're successful but only scalps (short term trades). Tonight we will be looking at the weekly open to see where we stand.
There are amazing opportunities in the crypto market now, you just need to be clear headed and have basic understanding of what is going on to not panic or get dragged into any hype. Remember, trading is not about drawing some trend lines or patterns, its far complex than that - basic technical analysis is not enough to make you profitable, you need the right data. Links below for further info.
Important update on Twitter on 10x Club, a weekly newsletter curated by me containing research & analytics on the crypto market & the amazing opportunities during the bear market - Check my Twitter or website link below:
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.