Welcome to this weekly series from the TradeRoom. My name is Dave and I’m the founder of The Crypto Den, an Australian-based crypto trading and education community aiming to give you the knowledge to take your trading game to the next level.
Crypto Market Outlook
Well, not much has changed on the TOTAL Crypto Cap since last week. Still hovering around that US$1.7 trillion area, still inside the bearish channel, still below key resistance and still below the daily 200 EMA. Nothing spectacular has happened with volume coming into the market as yet either, so I’m really not seeing anything here to get excited about. I still see the potential for a 30 percent drop, which will take us to a US$1.2 trillion valuation.
BTC has seen a small pump from US$35,000 to US$40,000 over the past few days, which has seen a lot of crypto socials get excited. But not this guy! Don’t get me wrong – a US$5,000 swing is no small thing, but it’s not big enough yet to really send us to the moon. We saw it happen in December where price action climbed US$6,000 and to the 50 percent Fibonacci level before further downside. This time it’s done almost the exact same movement, pending more downside.
I’ve said it a few times recently that I’m not bullish until we see a break above US$46,000. If we reverse here, does that mean I miss the bottom? Yep! But as traders, we aren’t searching for tops and bottoms as such, we are looking for clear directions and changes in market structure. That’s how you safely assure profitable trades.
I maintain there is huge potential to see BTC revisit the highs of the 2017/2018 bull run, and the chart below shows just how easily it could happen:
With geopolitical tensions changing each day, I don’t see this as out of the question. Gold and oil are both on the rise again after some profit taking, while the SPX is also having a relief rally. This lines up well with BTC having a bit of a run, but it will likely be short-lived.
Last Week’s Performance
Over the past few months and in last week’s article, I’ve outlined my intended trade for ADA, taking a short position at the break of the US$1.00 level. It’s currently down 20 percent from entry with (hopefully for me) a lot more to come. The first big profit-taking target is still US$0.30.
I’m still in this Neo short, which is shown clearly in the RR tool on the chart below. I entered at a daily level of resistance and have a TP set for US$16.00. If BTC continues down, I’ll likely let some of this ride.
This Week’s Trades
In the group, we’re looking for coins that have seen larger recoveries than others for short positions. One we’re watching at the moment is WAVES, as we’re seeing a buyer exhaustion wick at daily resistance so candlestick analysis is good, showing a potential 36% drop, which for us in the TradeRoom using leverage, that’s potentially a 360% profit. If the trade goes wrong, we’ll have a stop loss put in place to minimise our losses.
Another big one to watch out for is SOL. If the US$77.00 level breaks, there’s nothing there stopping it revisiting US$21.00 if BTC dumps. I’m already in a short trade on SOL from US$113.00, so won’t be entering any new positions on SOL.
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