I introduce myself, I am a young finance enthusiast. It’s been almost 3 years since I successfully trade crypto assets. After starting out in the stocks and forex market for a few years, I turned to Bitcoin and haven’t looked back since.
In this section, I intend to share my thoughts with you regarding the cryptocurrency market, Bitcoin and certain altcoins that I decide to trade. I base my reasoning on 3 trading techniques: the analysis of candlesticks, price action and certain patterns. For reasons of discretion, I will not use my real name, but you can call me Greg.
2018 was a very difficult year for many investors who did not have the expertise to survive a downtrend market. For others, more accustomed, 2018 was an opportunity to buy Bitcoin down and continuously shorten a trendy bearish market. Having started 2019 well, the market has finally turned around and we are at the start of the bullish trend, the opportunities in an extremely volatile market such as that of the cryptocurrency market are endless. These opportunities and visions of wealth can turn the head of more than one, this is why this section was created, in order to provide a solid structure and a certain rigor to help you navigate these troubled waters. .
My analysis is based on a top-down mentality, starting from a macro point of view to a micro point of view. To begin, I therefore suggest taking a look at the “Crypto Total MarketCap” offered by TradingView which covers the entire capitalization of the cryptocurrency market. Next, we will look at the “Crypto Total 2 MarketCap” which, in turn, covers the entire market capitalization of the 125 most important cryptocurrencies without counting Bitcoin. This “Total Crypto 2” allows us to see from a macro point of view whether it is worth investing in altcoins or whether it is better to remain mainly invested in Bitcoin or Fiat (EUR, USD,…) .
After looking at the macro state of the market, we are going to tackle the body of the subject: Bitcoin and Ethereum.
Crypto Total Marketcap
Looking at this chart, we can highlight three areas of interest:
- The green box: represents the last Bitcoin collapse that took place in November 2018. This area represents the area to defend at all costs, if it drops, I will almost entirely exit the crypto market for fear of seeing a new dump. The logic is that if the green box drops, the red box acts as a magnet and the market continues to collapse to this decisive area.
- The red box: represents the reversal point which underlines for me the definitive exit from the bear market. If it breaks, I will probably jump on shorts to take advantage of this bear market recovery.
- The yellow box: the area of current interest which will determine if the expansion seen in the previous days will continue. Let’s start by pointing out that since the parabolic rise of Bitcoin cannot be infinite, the first rejection is not surprising. We stopped this frantic race in a Macro logical place.
Here is my macro point of view with regard to Total Crypto MarketCap: I am bullish as long as the green box holds. Consolidation would be healthy and understandable at this point.
Crypto Total 2 MarketCap:
When we exclude Bitcoin, we find ourselves in a very different situation. This situation reminds us of that of Bitcoin before its last major expansion and we could almost draw a parallel.
This chart demonstrates the fragility of the altcoin market. Indeed, these are subject to two risks: a fall in Bitcoin and an aggressive rise in it. The value of altcoins is often attacked when Bitcoin moves quickly and violently.
After seeing a low, a low low and a high low in recent days, I am bullish. However, I would like to see $ 8200 spent to confirm my feeling. I would not position myself short below $ 8100, but if the yellow box breaks, I would not be surprised to see a Bitcoin drop down to $ 7250 and probably continue up to $ 6400.
I am currently a long spot on Bitcoin, I bought $ 3400 to $ 4000 and resold it during the climb to make a profit.
I am also in a long margin on Bitcoin that I trade in low time frame on Bitmex, exchange specialized in crypto margin trade. / platform / bitmex /
As we have seen, this first trade did not last long. However, it is not a shame or a problem to be wrong. The first objective of a trader is to preserve his capital and manage his risk. The trade taken is a trade that was taken with an r / r (risk reward ratio) of 3.69, which highlights the two situations: a gain of 6.95% and a loss of 1.88%, both multiplied by the leverage that you seems appropriate.
The reality is that the bear hypothesis was played and my stops were taken, thus resulting in a loss of 1.88% * my leverage. This is a way to start this series which allows me to emphasize that a good trader is not someone who is right most of the time but a trader who knows how to preserve his capital. The averages vary, but in general, a good trader will tell you that he is right every other time.
Indeed, technical analysis is above all a method to calculate your probabilities of success while minimizing your risks and maximizing your gains. This is why I was able to spend my evening quietly yesterday and when I woke up this morning I was not more disturbed. This rigor can be learned and I hope this series will teach you correctly!
I am a long spot from the red box (weekly order block) with a purchase average of ± 0.0255BTC / ETH.
I am bullish towards this structure, as long as the yellow box holds, I am not worried. The movements of the past few days confirm my feeling, however, I will cut short at this position if this yellow box were to drop and I will probably go short.
The majority of these coins are tradable on Bitmex with leverage (these multiplying gains and losses).
Hope to have helped you see more clearly, see you soon!