Methodical Trading - Volume 23 - "Bitcoin ATH Looming... But Alts Roar!" 🆙
Bitcoin Update, Ethereum Holds, Trading VS Holding, Alt Charts, Coinbase Listing
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Bitcoin has approached a critical resistance and continues to chop around the $60,000-$62,000 region.
Ethereum has held the previous All Time High and continues to look relatively strong.
A discussion between loading up on long term bags and trading is included.
Updates on previous Alt charts along with more Watchlist updates is included.
Coinbase will be directly listed on Wednesday!
Talking Points
Bitcoin Update
Ethereum Holds
Trading vs Holding
Alts
Coinbase Listing
Bitcoin Update
Looking at the Daily, Bitcoin continues to struggle at breaking the $60,000 - $62,000 region. Price has attempted to break back above this region multiple times and reach fresh All Time High territory. The consistent taps and lack of volatility here had allowed Alts to rise exponentially in the meanwhile. A break towards the upside likely leads to $70,000 and the key area for a confirmed breakout is above the $62,000 level.
Given the compression and lack of volatility over the past few weeks, a move towards the upside or downside is likely to determine the trend in the short-medium term. It would be unwise to fade the pending move whichever way it may break. A deviation above or below the current structure seems unlikely at this point.
Macro wise, the fundamentals are still extremely strong and six figure Bitcoin in 2021 seems increasingly more likely. Institutions continue to pour in with humongous outflows out of Coinbase taking place above the $50,000 level. A break of the gray region mentioned beforehand between $60,000-$62,000 would likely send price skyrocketing upwards and allow for a strong bull trend to take place again. Anything between $80,000-$100,000 is fair game at that point if $70,000 breaks as well.
Ethereum Holds
Zooming into the 4 hour, Ethereum has yet to break the $2,200 level and is also consolidating similarly to Bitcoin. Over the past few days, price has several wicks into the Gray region and has yet to make a strong break towards any direction. The lack of volatility and consolidation is likely the result of Bitcoin’s boring price action as well. As per usual, any move on Bitcoin will likely determine where Ethereum trends next as well.
A break of the Gray box should send price down back towards the $2,000 region. However, a clean break of the $2,200 level will likely see price explode towards the upside as it moves towards new All Time Highs. $2,500 and $3,000 seems like a fair target if the market continues to push upwards.
Trading vs Holding
Before moving on to Alt charts, I wanted to briefly talk about trading vs holding under the current market conditions. Many coins such as BNB, RUNE, BTT, TRX, etc. have printed massive gains in a relatively short period of time. With all the new money pouring into crypto, it is inevitable that beginner traders believe (and attempt) that they can move money from position to position and catch all the big moves during volatile times… This will NOT work. Combine this nonsensical belief with futures and leverage trading typically leads to utter disaster. Beginners will never end up a successful trader if they utilize insane things like 100x leverage on every trade and allocate a large portion of their funds to it. This type of mindset and strategy is no different than gambling.
In general, it is unrealistic to think that any trader can catch every single move amidst the hundreds of crypto currencies listed on each exchange. Losses and down days are also inevitable. Diversifying and holding a variety of digital assets while dedicating a small, certain portion specifically for trading is the best way to approach the market. Utilizing high amounts of leverage in a position that drastically affects the value of a portfolio is an extremely unwise decision. The volatility that crypto presents itself with is not seen in any other market currently. The first steps a beginner trader should do is dedicate a SMALL portion of their portfolio to understanding how to trade, reading charts, testing strategies, etc. A majority of new traders will end up losing money and blowing their accounts away attempting to trade crypto with leverage. Nobody wants to be the person who loses everything and witnesses the market continue to pump and pump while they are left on the sidelines. The feeling of losing everything while watching everyone else win is absolutely not something worth experiencing. This feeling of utter shame and failure can be easily avoided by simply holding spot bags over trading everything away.
Holding Spot bags is the best way to make money in the bull market as things continue to mature. More often than not, investors will outperform traders. The goal of trading is to outperform the assets that you would have otherwise already been holding. If you cannot accomplish that as a trader, then you have likely wasted your time attempting to trade an already extremely volatile market. Doing research, exploring a variety of digital assets, and bag holding throughout the bull market will likely reap returns that range in the hundreds to thousands of percentage gains.
The market is already against YOU and you have to ask yourself if you are willing to dedicate what is necessary in order to attempt to “beat the market.” This requires a severe amount of time, patience, dedication, and more in order to fully grasp the concept of trading. A majority of the portfolio should absolutely be dedicated to Spot bags and holding with conviction. It’s the same philosophy that can be attributed to the Stock market as well. Understanding what you are investing in, an entry and exit strategy, accumulating, etc. are all things that can be applied in Stocks or Crypto.
Trading is a hobby (for most people) and I do not discourage any beginners from educating themselves and attempting to trade a SMALL portion of their portfolio. It teaches discipline, patience, risk management, etc. However, every trader needs to know that a fine line rests between trading… and gambling.
Alts
BNBUSD Update:
Wow. BNB has shown nothing but pure strength in a parabolic rise over the past week and a half. Price has blown past the $500 price mentioned in the previous volume. The EMA 8 (Blue) has held on every test and price is skyrocketing with a current Daily wick into the $600’s. Coinbase will be listed on the U.S Stock market on Wednesday and the rise of exchange coins over the past week and a half seem to have a direct correlation to the pre-IPO contracts that Coinbase is currently valued at. Although it seems more likely that price should continue to trend upwards, de-risking going into the Coinbase listing on Wednesday is the safer move. If you would like to check out what $CBSE is currently trading at, you can do so on FTX HERE.
TRXUSD Update:
TRX has had a strong explosion above the previously outlined level. The Weekly still looks incredible here and continuation should be expected. As long as Bitcoin does not drop hard and continues to behave, Alts that have had a hay day like TRX should continue trending in the short term. A push towards 0.20 cent TRX makes sense from this point.
SRMUSD:
SRM recently wicked past the previous All Time High before getting shot back down. Price is currently retesting a key level here and is technically a long trigger with a target pushing into All Time High territory. Double digit SRM does not seem far off from here, but a break back below the level would lead to the 21/26 EMA’s (Orange/Yellow). This would be a key retest for the current trend as well and would not be a sign of the uptrend losing any momentum yet. A break below the 21/26 EMA’s would not be a good sign and waiting on the sidelines would be the better option if that were to play out. SRM is also another one of SBF’s coins as well as being part of the “Holy Trinity” on FTX. This trinity is a combination of SOL, FTT, and SRM. Overall, SRM should continue moving higher as long as Bitcoin behaves itself in the coming days.
LTCBTC:
Litecoin is still struggling to break back above the 200 EMA/MA’s (Black/Green) on the Daily. Price has yet to break this downtrend for months on end and is currently failing to do so yet again. A tremendous opportunity cost has been associated with holding Litecoin since the macro downtrend against the BTC pair has taken place. Price continues to lose value against Bitcoin and it simply does not make sense to enter a macro swing trade here until a full break of the downtrend has occurred. A simple Support/Resistance flip of the 200 EMA/MA’s would help signal that the downtrend has broken and that Litecoin may start outperforming Bitcoin once more. However, this has not taken place for an extremely long time still.
RAYUSD:
RAY is sitting on a previous Resistance level and attempting to flip it into Support. This is a basic S/R flip and is a technical long trigger. A stop loss below the EMA 8 (Blue) with a target of $14.40 is logical here and offers a favorable Risk:Reward ratio. Keeping it simple with this one.
Coinbase Listing
It seems that all eyes are on the Coinbase listing that is taking place on Wednesday. Some have interpreted it as a “sell-the-news” event, but Bitcoin is still consolidating and volatility has died down considerably. A major rally with Bitcoin going into the Coinbase listing would make this scenario more likely as a “sell-the-news” event.
Exchange tokens such as BNB, FTT, HT, etc. have rallied hard off of the Coinbase listing news and anticipation. If anything, the exchange tokens seem to be the most likely candidates to sell off going into Wednesday’s open. Either way, de-risking and playing it safe seems like the smartest option to take. Whether or not the listing is bullish or bearish in the Short term is still unknown. No other company has gone public with crypto at this scale and it will certainly be a historic trading day on Wednesday morning!
Keep calm and HODL on!
Please note that this newsletter is NOT Financial Advise. Neither Methodical Trading and/or it’s associates should be considered Financial Advisors. Any and ALL related Market centric material should be considered educational content for entertainment only. Methodical Trading and/or it’s associates are not responsible for any financial endeavors an individual/group chooses to take.