Monday Open - Weekly Market Update

Good morning! It's Monday, which means the weekly closes are in - and we have new information to use to our advantage. I generally start the week with a glance over the daily & weekly charts - to quickly get a feel of where we are. These weekly articles will give you an insight into the things I look at and the things I take away from them. Over the past weeks, bulls have clearly been in control of the market. The stock market pumped at unprecedented speed, and Bitcoin swept its highs multiple times, without ever going down. We saw some signs of that momentum fading (at least, for Bitcoin) last week, and the weekly close we just had adds more weight to that observation. The way I see it, we just rejected from an important area of resistance, locking in a weekly bearish engulfing candle in the process. These candles tend to announce the start of a correction - and I wouldn't be surprised if this candle is another one of those times. We had a period of expansion, now found resistance; and it's time for Bitcoin to find it's next bottom.

The pullback came as no surprise, because the daily chart was nice enough to give us fair warning. Earlier this week, we locked in a daily bearish divergence - right at the resistance area - and had the 200d EMA there to act as resistance too. Logical area to get a pullback, and the weekly bearish engulfing we just saw gives me additional confidence that this is indeed where Bitcoin sees a pullback.

The million-dollar question then is, where will Bitcoin bottom? There are two ways to look at that question. Many traders and investors (in my opinion, wrongly) try to predict the next bottom) - pulling support levels like the one below, and deciding that is where the next bottom will be. In my experience, it rarely is that simple. It is exactly for that reason that I prefer to let things unfold, and respond to the market as it feeds us more information. That being said, I'll be paying close attention to the gray box in the chart below. I think it'll be a reasonable area for Bitcoin to form a lower-timeframe bullish divergence, which could provide some relief. Doesn't have to be the actual local bottom, but it'll likely provide some trading opportunities, especially if you enjoy trading the lower timeframes.

I'm not one of those guys that enjoys trading the lower-timeframes though - I prefer to trade the real moves. You'll probably have seen the below chart on my Twitter feed. It is the most simple way to convey how I aim to add to my Bitcoin exposure. My main thesis going into the bear market is that I would get to accumulate below $60k. So far, I've had no luck - which is fine; markets rarely do exactly what you want them to do, that doesn't mean you cannot make money. Bitcoin has already made a significant push in to oversold territory; which suggests to me that the bottom is close or even already in. We haven't seen many bear market bottoms in Bitcoin's history yet, so data is limited, but every bear market so far has provided a great entry via the weekly RSI forming a higher low. In 2019, that RSI higher low formed with price also making a higher low - but in 2022, Bitcoin pushed lower, while the RSI didn't - forming a HTF bullish divergence. I don't really care which of those two recipes we get from here; all I know is that whenever that RSI forms its next higher low, I want to be a buyer. It can happen in any of the white dots on the chart, only time will tell.

As such, I'm paying closer attention to the daily chart. After all, it'll help me spot the next local bottom for BTC faster than I would see it on the weekly chart. Looking for classic signs of a bottom. Slow-sideways price action, bullish divergences, absorption at support - you name it. I'll (hopefully!) know it when I see it. Until then, I remain patient, mostly sitting on my hands.

The S&P Absolutely crazy. That's all I can really make of it. I'm enjoying this market a lot, because my portfolio is absolutely ripping higher - but what goes up, eventually has to come down. At least, partially. I don't think trying to time a top on this one is a bright idea. The market can remain irrational for longer than you can stay solvent and all. My strategy for this market is simple; buy some every month, and load up heavily when the market gives a good sell-off. And that's what I'll do. DCA every month, and if we get the inevitable crash, load up the truck - and letting it ride into the sunset.

As you can probably tell by now, I try to keep my strategies as simple as possible - not only to understand, but to execute too. This is by design. My experience is that the more trading decisions I have to make, the more likely I am to fuck things up. By reducing my moves to a minumum, at moments where I have the highest confidence, and the lowest likelihood to lose - I have built a strategy that tends to make money in the long run. That last part is important too. I use time to my advantage. Markets go up most of the time. If you wait long enough, the times where they go down, become irrelevant. That's why so many people just hold BTC and ignore the entire bear market. When you own BTC since $3,000 - a pullback from $126,000 to $60,000 might sting a little, but you don't really care knowing that it'll likely trade at $200,000 a couple years from now. CLOSING That's my first weekly update. This'll be a weekly thing - where I share my outlook on the market, and explain why I make the moves I make, or in this case, why I'm not making any moves at all. In between these updates, I'll share any further updates I have as they happen - and inform you of buying/selling transactions - if any. See you around!