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Crypto Bullish!
Charts on BTC, ETH and other coins plus an update on inflation!
TORG Trading
April 16, 2023
Crypto Bullish! Inflation going down?
Hey TORG Traders,
This is the first edition of my newsletter and I wanted to first thank you for reading. Ever since I quit my corporate job in 2021, people have asked me about my crypto journey. They have asked when the bottom will be coming or what does crypto winter mean. I had a lot of people ask if they should buy $SHIB when it was going parabolic. I gave my thoughts and opinions to people and saved people from being exit liquidity.
I want to provide information to you as a reader on the crypto charts from what I am seeing and what to look for as you prepare for this upcoming week. This is not financial advice in this newsletter and it is just my opinions typed out.
So lets dive into a recap from last week:
Macro News
CPI (inflation) data:
Core CPI YoY 5.6% (up from 5.5% previous)
Core CPI MoM .4% (down from previous .5%)
CPI (headline) YoY 5.0% (down from 5.0% previous)
CPI (headline) MoM .1% (down from .4% previous)
FOMC Meeting released notes from March 21st-22nd
TLDR: unemployment rate has remained low. Inflation remains elevated. Banking system is sound and resilient
Headline CPI is the raw inflation data and Core CPI deducts food and energy prices. Also, CPI is now calculated on a 1 year average versus a 2 year average. This changed in February and not a lot of people realize this when looking at the data. So when you’re seeing YoY numbers, it is not comparing apples to apples. The previous year is being calculated off of a 2 year average and this year is being calculated off of a 1 year average. It makes it messier to compare the data and really understand which direction inflation is going. Although, inflation is down in most of the data, we still are seeing higher prices. The goal for the Fed is to decrease inflation to 2%. As the Fed starts seeing unemployment rise and inflation decrease then they can look to turn the money printer back on and lower the rates.
There were some major bank earnings this past week which showed that they are making nice revenue off of credit cards and other debt.
Watch Schwab reporting this week as it could shake up some items in the financial markets.
Metals: Gold went over $2,000/oz again this week. Silver went over $25 this week.
Energy: Natural gas is one to keep an eye on at the $1.50 to $2.00 range. This was trading at $8 in November. Oil bounced off support at $66 and could look to run to $90 soon.
DXY: The US Dollar took a plunge this week testing the lows of 101. Usually if the Dollar is going down, equity and crypto markets will be up and vice versa.
Crypto Charts
Before I get into the charts, you’ll see that I use an indicator called Market Cipher. With most indicators, you have to wait for the data so it is lagging. With Market Cipher it is a leading indicator, so it takes the current data on the chart and puts it in oscillator. The red and green waves are money flow (green means money coming into the asset, red means money leaving the asset). The other item to look for on Market Cipher are the momentum waves (blue waves). The higher the waves, the more momentum you have on that side. The shorter the waves the less momentum and possible a price reversal.
You will also see a volume profile (yellow and blue bars) and this is where liquidity lies within the chart. The larger amount of liquidity the further out the bars will stick on the chart. I call them fingers. You’ll want to look at where the fingers are at on the chart. Where you don’t see fingers, then you can expect price to move quickly through those areas.
Also, I should note that the weekly closes on Sunday nights at 8 pm EST. This weekly close looks bullish for BTC and ETC.
$BTC
Above is the daily $BTC chart. We have been trending up since the end of 2022. A lot of people have said we bottomed. I don’t care, we just play the charts around here and analyze the data presented.
Points of interest for this week:
Upside
$32k - This is the top that I’d look for BTC to break and then hold to make the next move up to $38k to $40k.
Downside
$30k - I want to see BTC hold $30k, but if it doesn’t then I’d look at $28.7k and $25.2k (this is where a lot of traders were front run as it never retested this area in the uptrend
Points of interest in the long run:
I expect BTC to retest the $20k to $22k in this run at some point, so if you feel like you missed out then I still think we have that area to retest on liquidity.
What is Market Cipher telling us?
It looks like we are due for a little bit of a pull back, so as you see we have a red dot on the daily which usually means bearish and the money flow is just starting to be in the green. We might test a little bit higher, but be ready for a little pull back.
$ETH
Above is the daily $ETH chart. We have been trending up since the end of 2022. A lot of people have said we bottomed. I don’t care, we just play the charts around here and analyze the data presented.
Points of interest for this week:
Upside
$2300 - This is the next liquidity area I would look to take profits. It could run up to $2500, but I think that will be the maximum we will see at the moment before a good pullback.
Downside
$2034 - I want to see if this will hold as support. If not we will move to the next area.
1844 - I would look at this area for support to hold.
$1700 to $1750 - This seems to be a psychological level that has been tested a lot in the past.
Points of interest in the long run:
I think that we will retest this current point of control (red line on the chart) at $1550. That was the area where ETH was before the FTX collapse, so it’s a significant area of interest for people. We could wick back down to test liquidity in the $1485 area, but do not plan on it.
What is Market Cipher telling us?
This is very similar to BTC except we have not confirmed a red dot yet. This means that we could run up a little bit more before we see a pullback. Money flow is just starting to be green again, so I would look at buying the dips here at the points referenced above.
$ARB
Above is the $ARB hourly chart. Arbitrum is a new coin that launched in March 2023, so I wanted to zoom in and show you this chart. Arbitrum is a Layer 2 solution for ETH.
Points of interest for this week:
Upside
$1.75 - This is the top of the current range. If we break and flip this to support then I’d look at this coin hitting $2.
Downside
$1.56 - This is the S/R flip (this means where resistance flipped to support and how we want to see it hold support from here on out. Once it fails to hold support then I’ll look for it to hold resistance)
$1.38 - A gap in the chart that I’d look for a fill at some point.
Points of interest in the long run:
I think ARB will do well in the next bull run with it being a L2 solution. I think L2s and zk rollups will do well. Comparable coin is $OP as another L2. A lot of people believe in ARB and it has a good ecosystem with games already launched on it. Look at $MAGIC for an established coin within this ecosystem. I think the downside is around $1.10 and if it falls under $1 then I think it’s a really good buy.
What is Market Cipher telling us?
As you can see here that the coin has been well into the green money flow for a couple of hours. If we retest $1.75 and show a lower momentum wave then I think we could had back down for a pull back.
$LINK
Above is the day chart for $LINK. Chainlink has been around for a long time and is a good coin to take a look at. I really feel bad for people who have held this for a while because we have been in this range for almost 12 months. When LINK breaks out, it breaks out, so keep an eye on it. It will lull you to sleep, but when it goes, it is very rewarding.
Points of interest in the long run:
$9.75 - This is a big area of resistance and if it breaks here then I think over $11 is on the table and even up to $16 to $18. As you can see with the volume profile, there is a lot of low volume to the upside. Liquidity has been building to the downside for a while
$7.22 - This is the current point of control (where most liquidity and volume has been traded) and I would look for this to be a support. If not then we would head back to the bottom of the range at $5.20.
What is Market Cipher telling us?
We are barely in the green here, so if we get a pull back to retest that POC then I can see us building up more liquidity to send this coin higher in the future. I like where LINK is going and the setup it is making at the moment.
What Am I Currently Reading?
I’m currently reading The Wyckoff Methodology in Depth by Ruben Villahermosa Chaves. I’m really fascinated by the Wyckoff method and how it has been used from back in the 1800s. I highly suggest this book as it goes in depth to explain the theories and phases behind the Wyckoff theory and how to use it in your trading system. I just read the Price Action and Volume Section of Ruben’s book called Trading & Investing for Beginners. This is a great read for a beginner or someone who needs to brush up on how to read price action and who wants to learn more about how to look at volume.