Methodical Trading - Volume 15 - "Bitcoin Moonshot & Ethereum Primed?
Bitcoin, Ethereum, Litecoin, Alts Update, & General Market Knowledge
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Bitcoin completely broke through $30,000 and quickly rose to $34,800 in the hours that followed. The vertical movement upwards simply is not finished yet!
Ethereum benefitted greatly with a move above $800 and appears to be holding the region so far. If there was a time for ETH/BTC to begin reversing… Now would likely be the best possible chance.
Litecoin is approaching a High Time Frame resistance here on the USD pair. As mentioned in previous volumes, the LTC/BTC chart still has some work to do against the BTC pair as well.
Alts have also moved upwards in the recent Bitcoin pop. Here are some updates and new setups to go along with the current market conditions.
Talking Points
Bitcoin Moonshot
Ethereum’s Time To Shine
Litecoin Lagging
Alts Updates & Setups
Bitcoin Moonshot
Bitcoin busted through $30,000 like it was nothing. In fact, it is currently well above the 1.618 Fib. level mentioned in the previous Volume and looks to be closing the Weekly candle with tremendous strength. Unlike the multiple attempts to break $20,000, price immediately broke $30,000 and is already gearing up for higher movement beyond $35,000.
Due to the extreme parabolic nature of Bitcoin currently, zooming into the 1 hour is the best way to look for Long entries at the moment. The 21/26 EMA’s (Brown/Orange) are continuing to provide great entries to get back into Bitcoin and the 100 MA (Light Purple) has also provided solid entries as well for slightly deeper pullbacks. Overall, these pullbacks on higher timeframes look relatively shallow. Zooming into smaller time frames will help give entries to ride the macro trend due to the parabolic price action.
At the moment, the 1 hour chart appears to be forming a small bearish divergence on the RSI. Price is already beginning to react to this divergence and may make a small move back into the 21/26 EMA’s. If given the opportunity, a Long entry under the current circumstances would be ideal. This does not mean to Short here, but rather to prepare for a shallow pullback to begin entering a Long.
One thing to take note of is the extreme positive funding rates that have taken root over the past 24 hours. Long positions are paying quite a bit in order to keep their leveraged trades open. Typically, this type of funding rates are not sustainable and usually result in a liquidation cascade to wipe the offsides Long/Short positions. Caution should be warranted here in case of a quick Long squeeze that results in resetting the funding rates back to 0.01%. If given the right setup, a default funding rate coupled with pullback into a Support region could provide another easy Long position. This is simply a speculative scenario at the moment, but it is certainly one scenario worth keeping an eye out for!
Ethereum’s Time To Shine
Ethereum was able to benefit off of the huge Bitcoin pump. Price has failed to rally as well with ETH/BTC, however, it appears that a nice reversal setup appears to be taking shape here.
Following up on the previous Volume’s chart, price broke above the triangle and has indeed followed the pattern to reach $800+. Zooming out macro wise, ETH/USD is approaching a High Time Frame resistance that was established in April ‘18. If price can break above this level, then the next logical target would be just under the $1,000 region. A break of these two resistances and price will likely visit All Time Highs shortly afterwards.
ETH/BTC is currently forming a small bullish divergence and looks to be gearing up for a reversal in the days/weeks to come. The wick for the Daily candle is a good sign currently that buyers are beginning to step ini this area. Building a conservative position here followed by a larger position once the Daily candle closes is a good setup to take. Naturally, reversals statistically have a lower win rate percentage because you are betting against the trend. However, the Risk:Reward that a reversal offers in scenarios like this are tremendous opportunities that should not be taken for granted! Currently, their are Take Profit levels here for ETH/BTC, but if price action shows some extreme bullish momentum, then holding for higher targets and trailing stop losses may be the better idea.
Litecoin Lagging
Litecoin has had some nice gains for the USD pairing, but the real movement upwards will take place once LTC/BTC also begins to rally as well.
LTC/USD on the Daily also looks pretty fantastic. Price has been able to hold the 21/26 EMA’s (Brown/Orange) and every slight dip below it is quickly bought back up. Price looks good here for further continuation as long as current market conditions hold up and Bitcoin continues the parabolic trend. This is a pretty simple outlook of the LTC/USD chart, so we are going to zoom out to the Weekly chart for high time frame levels to pay attention to.
The Weekly chart for LTC/USD looks to be tapping at a resistance from July ‘19. However, the current Weekly candle looks far stronger than the doji that was formed back then. A break of this resistance and price should look for $172, $218, and above that would also likely lead to All Time Highs. Take these levels one at a time and wait for breaks of these resistances before increasing or taking Long positions! The entire crypto currency market looks quite bullish at the moment and zooming out to the higher time frames will likely make for more optimal Take Profit targets.
LTC/BTC on the Daily has unfortunately been unable to hold the 200 EMA (Green) along with the 200 MA (Black). However, price action may resemble a bit of a macro bottoming formation so long as it doesn’t break below 3600 sats. Additionally, if ETH/BTC begins to reverse, then LTC/BTC should also reverse as well and begin to play catch up with Bitcoin.
Altcoin Updates & Setups
RSR/USDT:
Wow… That was fast! As mentioned in the previous Volume, a trip to the Range High was the target for RSR/USDT after breaking the upper diagonal and the EQ. Taking profit here is a great idea and leaving some on the table with raised Stop Losses in case RSR goes for a moonshot towards 0.05 cents and beyond is the best approach. Congratulations to everyone who followed this on NekoZ’s Twitter and saw this in the previous Volume!
RSR/BTC:
RSR/BTC has also done very well over the past couple days. Stops can now be raised to breakeven and allow price to make a trip towards the Take Profit point.
SUSHI/BTC:
SUSHI has not broken the above resistance yet and has not triggered this breakout Long. Still awaiting entry here.
DOGE/BTC:
The old DOGE bag that was discussed in Volume 9 has finally made a move! As DOGE usually goes, rapid acceleration typically follows after price moves out of the accumulation zone. Price has quickly pulled a 2x on the BTC pair and the original targets of 60, 81, and 100 still stand!
UNI/USDT:
UNI looks nice here as it begins to consolidate after a pretty large move up. Building a position here with a relatively loose stop loss and target the previous Daily close from September.
RUNE-PERP:
RUNE looks primed here to continuing gunning higher. Targeting the 1.618 Fib. level with a Stop Loss below the previous All Time High. Pretty simple setup here with a favorable R:R ratio!
General Market Knowledge
This is a brief section here simply to touch on the current state of the market. Many life changing amounts of money will be made over the next few months and several individuals have already experienced this with Bitcoin continuing to break All Time Highs every other day. However, this will not last forever!
Keep your emotions in check. Take each trade level by level. Do not get greedy and over leverage yourself into a position where you could lose it all. The vertical price action can be addicting and make you feel some extreme FOMO, but that is no reason to begin risking upwards of 10-20% of your entire portfolio. Take things one step at a time and do not let euphoria and greed overcome your ability as a trader or common sense… Good luck everyone and thank you for reading Volume 15 of Methodical Trading!
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