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
The TOTAL cryptocurrency marketcap is sitting at US$1.9 trillion, which is where it was two weeks ago. It’s also still trending down in this big bearish channel keeping to a bearish market structure. What this tells me is we have seen the relief rally we alluded to in the last article but still not enough influx of capital to see a breakout into a new structure. It’s bearish until it’s not! A breakout of this channel and above the daily 200 EMA will add US$200 billion of capital back into the market. When this happens, we might get excited.
Bitcoin to me is still failing to show any real volume. Typical of a bear flag setup, we see a relief rally/dead cat bounce with lowering volume indicative of continuation to the downside. This relief rally has pulled BTC back to the 618 Fibonacci from the last swing, which as most of our trading room members now know is a common retracement level.
Until BTC breaks out above the daily 200 EMA and above US$53,000, the bear case seems much stronger than the bull.
Something else to note at the moment is the stability of the global economy. We have the stock market selling off while gold and oil surge. Big players are hedging, in my opinion, and with the threat of war in Eastern Europe, we’re seeing oil prices rise. As much as I’m somewhat a BTC maxi, I’m not sure it’s matured enough yet to become a hedge in times of uncertainty, like precious metals can be.
Last Week’s Performance
I’m currently still in quite a few short positions, which I’ve shared in our Facebook Group if you’d like to check them out. I’ll share a couple of wins and losses with you from the past week below.
XTZ/USDT
Textbook trade here. Entered short at resistance, took profit at support. Doesn’t get simpler than that! I took 70% of that position off the table and moved the stop loss into a positive position.
UNI/USDT
This isn’t necessarily a losing trade because it never reached our entry, but I thought I’d add this in here to show you can’t win them all. This UNI chart was in last week’s article showing a potential short trade, however we never reached that point and in hindsight we could have entered short from the 200 EMA line. Win some, lose some.
ENJ/USDT
Another basic yet effective trade was a short in ENJ. The rising price with lowering volume (just like BTC at the moment), sprinkled with some bearish divergence at resistance, revealed a nice, short entry point!
This Week’s Trades
There are two short trades in particular I’m eager for this week! I’ve been sharing information about them both for quite a while in our trading group.
DOGE/USDT
Again with DOGE!
I STILL see a potential 70% drop on DOGE, currently rising in price on lowering volume as well. I’m currently in a short on DOGE from US$0.16 and, as I’ve been saying, there’s NOTHING stopping a US$0.04 price target!
ADA/USDT
I’ve been writing about this trade since December 6, 2021, and still waiting! When this daily support level around the US$1.00 mark finally breaks, ADA could likely see an enormous drop up to 80%! In my opinion, this is highly likely if the BTC bearflag (mentioned at the start of this article) plays out.
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