HODL with a TwistCME: Micro BTC Futures ( CME:MBT1! )
Federal Reserve monetary policy is the dominant market mover across asset classes. Financial markets around the world rise and fall by any hint of the next policy move.
Last Friday, US stocks jumped after a weak April jobs report boosted hopes that the Fed could start cutting interest rates soon. The Dow Jones Industrial Average gained 450 points, or 1.18%, to 38,675. The S&P 500 surged 1.26% to 5,128, while the Nasdaq Composite rallied 1.99% to close at 16,156.
The nonfarm payrolls report, released by the Bureau of Labor Statistics, showed 175,000 jobs gain in April, below the 240,000 jobs expected by Dow Jones economist survey. The unemployment rate edged up to 3.9%, versus 3.8% in March.
After the jobs report, traders now price in a second rate cut by the end of 2024. Fed funds futures trading data suggests a 66% likelihood of a 25-basis-point rate cut in September, according to the CME Group’s FedWatch tracker of futures market pricing.
Don’t Pinch Your Hope on More Rate Cuts
Investors often attempt to front run the Fed’s decisions. Track records show that they are usually wagering the wrong bet. As recently as last December, they expected seven rate cuts in 2024 and pushed major stock indexes to a series of new record highs. Lately, the rebounding inflation ditched the hopes for early rate cuts. Before last week, market consensus was down to one rate cut in 2024, with talks of no cut and even a rate hike.
In my opinion, investors speculating on rate cuts overlooked a key factor, the 2024 US Presidential Election. With election day less than six months away, the Fed would be cautious with abrupt policy moves. They tend not to shift policy directions ahead of the election, just to stay clear of any accusation of influencing the result in any way.
Many investors pinch rate cut hopes on the assumption that the Fed would ease rates to help the current Administration get reelected. They failed to understand that the Fed Chair is not a cabinet member. He reports to the Congress, not the President. The Federal Open Market Committee, the rate-setting body, is not a department in the Executive Branch. It was founded by the Congress and will report to the Congress only.
The Fed has kept the rate higher for longer than many of us expected. Since the last rate hike in July 2023, they kept the Fed Funds rate unchanged in the past six meetings.
Borrowing costs, including mortgage rate, auto financing, credit card and business loan, have all been pushed up significantly in the last two years. One or two rate cuts would not materially lessen the cost burden incurred by households and businesses.
Despite headwinds and signs of the US economy cooling off, US stocks are currently priced near their all-time high levels. It is not a good time to jump in and chase the high prices. On the other hand, shorting the market now is a risky proposition. Investors exhibit strong tolerance for bad news. The best move is to wait. Outside of stocks, cryptocurrencies show upside potentials, particularly from a long-term perspective.
Investing in Bitcoin for the Long Haul
On February 14th, I posted this trade idea, “A Bitcoin Bull Run?”. At the time, spot Bitcoin was trading at around $50,000. Bitcoin reached a new all-time-high of $73,000 on May 3rd. It has since fallen to as low as $58,000 and is now trading at $64,125.
I identified three fundamental key drivers for a secular long-term bull market for cryptocurrencies, which is recapped below:
• Firstly, there is a limited supply of bitcoins with a total cap of 21 million.
• Secondly, the demand for crypto investment could increase substantially.
• Thirdly, an excessive dollar supply could help raise bitcoin prices.
Today, I would like to focus on the technical strength illustrated in Bitcoin price chart. In the past eight years, Bitcoin managed to reach a new high four times, after experiencing significant drawdown each time.
• After peaking at $20,089 in 2017, Bitcoin fell 84% to $3,191 by December 2018.
• The next bull run, starting in September 2020, pushed Bitcoin price to a new ATH at $58,777 in March 2021. This is a gain of 192% from the previous ATH, and up 1742% from the previous low.
• Bitcoin price was cut in half to $29,562 in July, before rising to another ATH of $69,000 in November 2021. This is a gain of 17% from the previous ATH, and up 133% from the previous low.
• In the next year, Bitcoin fell to $16,625, a drawdown of 76%. The SEC approval of Bitcoin ETF pushes the benchmark cryptocurrency to its new ATH of $73,000 in March 2024. This is a gain of 6% from the previous ATH, and up 339% from the previous low.
Bitcoin price trend shows that investing in Bitcoin in the long run has been profitable. However, timing makes a significant difference in investment returns.
Trading Bitcoin with Futures Rollover Strategy
While the view of holding on for dear life (HODL) is shared by many Bitcoin investors. There are several issues when it comes to investment strategies.
Firstly, with bitcoin trading over $64,000, future price increases do not offer the same level of return dollar for dollar. Hypothetically, if Bitcoin goes back up to its ATH of FWB:73K from GETTEX:64K , the $9,000 gain equals to 14% in return. For a comparison, if you bought Bitcoin for $17K in December 2022, the same $9,000 gain would be 53% in return. To counter the effect of higher prices, investors could consider using leverage.
CME Micro BTC futures ( LSE:MBT ) provide leverage and capital efficiency. The contract notional is 1/10 of 1 BTC. Initial margin is $1,515. The June contract (MBTM4) was last settled at $63,865. At current price there is a 4.2 times leverage built in the contract, which is the ratio of 6,386.5 (1/10 of 1 BTC) divided by 1,515. If the futures price touches the previous ATH, a long futures position would gain $913 (= 7,300-6,387), and the return would be a +60%, vs. +14% investing in spot Bitcoin, as we illustrated above.
Secondly, futures contracts have a limited lifespan that will influence the outcome of your trades and exit strategy. Micro Bitcoin trades actively in the nearby May and June contracts. Liquidity in the back-month contracts has yet to pick up. A trader may be right about the long-term rise in Bitcoin prices. However, this may not happen in the next two months before the nearby contracts expire.
To maintain a long position in Bitcoin over the long run, while enjoying capital efficiency through leverage, a trader may employ a futures rollover strategy.
Rollover is when a trader moves his position from the front month contract to another contract further in the future, prior to the expiration of his existing holding.
The title chart illustrate how to hold a long Micro Bitcoin Futures (MBT) position overtime:
• In April, a trader buys (going long) a June contract (MBTM4).
• Approximately two weeks before the contract expires on June 28th, the trader enter an offsetting trade, going short on MBTM4, to close his existing position. He would book a profit or loss, determined by the difference in selling and purchasing prices.
• Simultaneously, the trader would buy an August MBT contract (MBTQ4) and reestablish a long position in Bitcoin.
• In mid-August, the trader will close out MBTQ4 (going short), and buy an October contract (MBTV4), and continue to hold a long position on Bitcoin.
• The trader would repeat the above steps, so far as he holds a bullish view.
Finally, Bitcoin prices are extremely volatile. Holding spot Bitcoin with no leverage could face potential drawdown of 70%-80%. With leverage in futures, a sharp price move in the wrong direction could quickly deplete the available fund and trigger margin calls.
One advantage Micro Bitcoin has over the spot crypto is the daily price limit. If Bitcoin moves up or down 10% within the trading day, futures trading will be halted. This will give the market time to cool off and help investors avoid being blown out by short-term panic.
Experienced investors may consider using stop loss on futures or buying a protective put options to hedge such downside risks.
Happy Trading.
Disclaimers
*Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services.
CME Real-time Market Data help identify trading set-ups and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
Hodl
BTC - 60k Support Confirmed 👌Hello TradingView Family / Fellow Traders,
📦 This week, BTC confirmed the rejecting of the $60,000 support.
📈As long as the $60,000 support holds, I am expecting a continuation towards the next resistance at $70,000.
🏹 Then for the bulls to remain in control, and test the $82,000 and upper bound of the red channel, a break above the $72,000 resistance is needed.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
ETH - Critical Zone 👀Hello TradingView Family / Fellow Traders,
As per my last analysis, ETH is now hovering around the $2900 - $3000 support.
What's next?
Scenarios:
1️⃣ Bullish
For the bulls to take full control again, a break above the last high marked in red is needed.
In this case, a movement towards the upper orange trendline and blue structure at $3350 would be expected.
2️⃣ Bearish
In parallel, if the $2,900 support is broken downward, we expect a bearish movement towards the $2,500 - $2,600 demand zone.
Which scenario is more likely to happen first? and why?
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
HBAR - Ready For Another Impulse?Hello TradingView Family / Fellow Traders,
🚀After a massive 108% surge, HBAR rejected the $0.15 - $0.17 resistance zone and is currently in a correction phase.
HBAR is now approaching a strong demand zone marked in blue, so we expect the bulls to kick in soon, as long as the demand holds.
📈 For the bulls to take over again, we need a momentum candle close below above the last major high highlighted in red.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
BTC - Wait For The Bulls 🦬Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 BTC has been stuck inside a range within the shape of a symmetrical triangle.
Currently, BTC is in a correction phase, approaching the lower bound of the triangle.
Moreover, it is retesting a strong support and round number $60,000.
🏹 Thus, the highlighted blue circle is a strong area to look for buy setups as it is the intersection of the blue support and lower orange trendline.
📚 As per my trading style:
As #BTC approaches the blue circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
This bullish scenario will hold, unless the $60,000 is broken downward.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
BTC - Roadmap to 82k 🗺Hello TradingView Family / Fellow Traders,
📦 Post-halving , BTC has been hovering within a big range between $60,000 support and $70,000 resistance.
📈 For the bulls to take full control again , and test the $82,000 and upper bound of the red channel, a break above the $72,000 resistance is needed.
📉 In parallel, if the $60,000 support is broken downward, we expect a bearish movement towards the $52,000 demand zone.
Which scenario is more likely to happen first? and why?
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
BTC - Boring Month⁉️Hello TradingView Family / Fellow Traders,
BTC has been hovering within a big range between $60,000 support and $70,000 resistance.
Scenarios:
1️⃣ Bullish
For the bulls to take full control again, a break above the $72,000 mark is needed.
In this case, a movement towards the $80,000 resistance would be expected.
2️⃣ Bearish
In parallel, if the $60,000 support is broken downward, we expect a bearish movement towards the $50,000 demand zone.
Which scenario is more likely to happen first? and why?
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
BTC - Roadmap to 80k 🗺Hello TradingView Family / Fellow Traders,
For those who know me, it's clear I always like studying previous price action.
"Know yourself, know your enemy. Many battles, many victories."
~ Sun Tzu
I find the Bitcoin Daily Chart interesting.
If we compare this impulse movement to the previous two, we can see that after 58 days, the correction starts, and it actually did as per my last BTC cycles analysis.
What's next?
As long as the $60,000 support holds, we are now expecting the start of the next impulse movement.
According to the previous bullish impulse, we expect this upcoming impulse to reach the $80,000 mark.
What do you think?
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
ATOMic Impulse Soon 💣Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 ATOM has been overall bullish, trading within the flat rising wedge pattern in black.
Currently, ATOM is in a correction phase, approaching the lower bound of the wedge.
Moreover, it is retesting a strong support and round number $10 in gray.
🏹 Thus, the highlighted Atom logo with the blue arrow is a strong area to look for buy setups as it is the intersection of the gray support and lower black trendline.
📚 As per my trading style:
As #ATOM approaches the blue arrow zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
IDEA - Follow The Trend 📈Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 IDEA has been overall bullish , trading within the flat wedge pattern in orange.
Currently, IDEA is in a correction phase, approaching the lower bound of the wedge.
Moreover, it is retesting a strong demand zone $0.0026 - $0.003.
🏹 Thus, the highlighted blue circle is a strong area to look for buy setups as it is the intersection of the green demand zone and lower orange trendline.
📚 As per my trading style:
As #IDEA approaches the blue circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
ETH - Wait For The Bears, then The Bulls📉📈Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 ETH has been hovering with a range between $3000 and $3500.
📉 After breaking below the last major low at $3500, ETH has been bearish from a short-term perspective trading within the falling red channel.
Moreover, the $3000 - $3100 is a strong support zone.
🏹 Thus, the highlighted red circle is a strong area to look for buy setups as it is the intersection of the green support and lower red trendline.
📚 As per my trading style:
As #ETH approaches the red circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
BTC - Are You Ready?⏱Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 BTC has been hovering within a range in the shape of a symmetrical triangle.
📉 After breaking below the last major low in red, BTC has been bearish from a short-term perspective and approaching the lower bound of the triangle.
Moreover, the 60k - 62k is a strong support zone.
🏹 Thus, the latest blue arrow is a strong area to look for buy setups as it is the intersection of the blue support and lower orange trendline.
📚 As per my trading style:
As #BTC approaches the blue arrow zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
MPC - Shift In Momentum In Action 📉📈Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📉 MPC has been overall bearish trading within the falling channel in red.
📦 Currently, MPC is hovering within an Accumulation Phase between $0.3 round number and $0.36 major high.
📈 For the MarkUp phase to start, shifting the momentum from bearish to bullish, a break above the last major high in red at $0.36 is needed.
🎯 In such a scenario, a movement towards the $0.525 resistance would be expected.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
SOL - Flag pattern, next Target is $400BINANCE:SOLUSDT (4H CHART) Technical Analysis Update
SOLUSDT is currently trading at $102 and showing overall bullish sentiment
We have clear Flag pattern on the SOL 1D chart and currently we are seeing flag pattern breakout.
If the price follows the flag pattern then next target for SOL is around 400
Entry level: $ 95-102
Stop loss level $70
Target 1: $ 127
Target 2: $188
Target 3: $250
Target 4: $320
Target 4: $400
Max Leverage: 2x
Don't forget to keep stop loss.
Follow Our TradingView Account for More Technical Analysis Updates, | Like, Share and Comment Your thoughts.
Cheers
GreenCrypto
BTC - Narrow Range📦Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 According to our last analysis (attached on the chart), BTC rejected the 60k-62k support and traded higher.
What's next?
🏹For the bulls to remain in control and initiate the next impulse that will lead to movement up to 80k, a break above 70k is required.
Meanwhile, as BTC retests the 60k support, we will be on the lookout for new short-term buy setups.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
BTC - Correction Phase Started 📉📈Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 After breaking below $70,000 , BTC started the bearish correction phase.
As long as the $70,000 resistance holds, we anticipate a movement towards the lower bound of the red wedge pattern.
Moreover, the $60,000 - $62,000 range is a massive support zone.
🏹 Thus, the highlighted red circle is a strong area to look for buy setups as it is the intersection of the blue support and lower red trendline.
📚 As per my trading style:
As #BTC approaches the red circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
ETH - Wait For It 🏹Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 ETH has been overall bullish , trading within the rising broadening wedge in red.
Currently, ETH is in a correction phase and it is approaching the lower bound of the wedge acting as a non-horizontal support.
Moreover, it is retesting a strong support and round number $3500.
🏹 Thus, the highlighted red circle is a strong area to look for buy setups as it is the intersection of the blue support and lower red trendline.
📚 As per my trading style:
As #ETH is around the red circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich
SOL - Next Stop => $200Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 SOL has been overall bullish trading within the long-term rising broadening wedge in blue.
How high can SOL climb?
The marked blue circle represents a significant resistance and overbought zone as it marks the intersection of the upper blue trendline and $200 round number.
Thus it would be a robust area to anticipate a potential reversal.
🏹 Meanwhile, as long as the $150 support holds, a continuation towards the $200 mark would be expected.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
BTC - Detailed Analysis - Medium to Long TermHello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📚 As long as the $70,000 holds, we are expecting a continuation till the upper bound of the channel and $80,000.
📚Always follow your trading plan regarding entry, risk management, and trade management.
Good Luck!.
All Strategies Are Good; If Managed Properly!
~Rich
BTC - When in doubt; Zoom out!🔎Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 After breaking above the $70,000, BTC is heading towards the next potential round number at $80,000
How high can BTC climb?
The marked red arrow represents a significant resistance and overbought zone as it marks the intersection of the upper red trendline and $80,000 round number.
🏹 Thus it would be a robust area to anticipate a potential reversal.
Meanwhile, as long as the 70k holds, a continuation towards the 80k would be expected.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Richard Nasr
ETH - 4500 Soon 📈 If...Hello TradingView Family and Fellow Traders,
This is Richard, also known as theSignalyst.
📈 ETH has shown an overall bullish trend, trading within the rising broadening wedge pattern highlighted in red.
It's evident that ETH has been respecting significant round numbers, particularly the 500 marks.
Following its breakthrough above 3500, ETH traded higher to find resistance around 4000.
📈 To maintain control and drive prices higher towards 4500, the bulls require a daily candle close above 4000.
📉 In parallel, ETH retests the lower bound of the wedge pattern, we will be seeking trend-following buy setups on lower timeframes.
📚 Always adhere to your trading plan, especially regarding entry points, risk management, and trade execution.
Wishing you all the best of luck!
Remember, All Strategies Are Effective When Properly Managed!
~Rich
DOGE - Who Let The DOGE Out 🐶Hello TradingView Family / Fellow Traders. This is Richard, also known as theSignalyst.
📈 DOGE has been overall bullish, trading above the blue trendline.
Moreover, the 0.15 marked in blue is a strong support zone.
🏹 Thus, the highlighted blue circle is a strong area to look for buy setups as it is the intersection of the blue support and blue trendline.
📚 As per my trading style:
As #DOGE approaches the blue circle zone, I will be looking for bullish reversal setups (like a double bottom pattern, trendline break , and so on...)
📈 In parallel, for the bulls to take over medium-term and start the next impulse movement, a break above the last major high in red at 0.175 is needed.
📚 Always follow your trading plan regarding entry, risk management, and trade management.
Good luck!
All Strategies Are Good; If Managed Properly!
~Rich