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Volatile Week for Crypto! Debt ceiling raised????
End of the week discussion on $BTC and $ETH plus PCE and debt ceiling information.
TORG Trading
April 28, 2023
Volatile Week for Crypto! Debt ceiling raised????
Good morning TORG Traders,
I hope you had a great week. I apologize for not getting a newsletter out on Sunday, but I was sick with a 103 to 105 degree temperature and laid up on the couch most of the day. I wanted to get a special Friday edition out to you because there was some JUICY news this week. Lets get into it!
Macro News
PCE Information (Personal Consumption):
Core PCE YoY 4.6% (down from 4.7% previous)
Core PCE MoM .3% (same from previous)
PCE (headline) YoY 4.2% (down from 5.1% previous)
PCE (headline) MoM .1% (down from .3% previous)
Prices are going down on personal consumption with it being down across the board from YoY and MoM. This means the dollar is getting weaker.
GDP (Gross Domestic Product) QoQ - 1.1% (down from 2.6% previous)
GDP Price index QoQ - 4.0% (up from previous 3.9% and up from forecast of 3.7%)
GDP fell for the first quarter and usually when it falls for two straight quarters it signals a recession. Sometimes our government doesn’t want to acknowledge this at all, but for your information that is the technical measure for a recession definition. GDP measures the annualized change in inflation-adjusted value of all goods and services produced by the economy.
The House passed a bill to raise the National Debt Ceiling by 1.5 trillion (217-215 votes) which now goes to the Senate. Crypto News
Crypto News
On Wednesday there was a major selloff because the US Govt and Mt Gox (a really old crypto exchange) moved some of their BTC around which caused a pretty major sell off (8.50% in 2 hours). Major news events like this will cause either a major sell off or pump in the market and can be good entries.
Metals: Gold traded under $2,000 this week. It needs to hold $1,970 or else price will test $1,950 down to $1,860. Silver traded under $25. Needs to hold $24.50 or else price will test low $24s; next stop is $23.50 after that area.
Energy: Natural gas is looking sexy up to the $3 range. I think its a good accumulation area right now for a long term hold back up to $7 to $8. This was trading at $8 in November. Oil topped out at $83 and is trading at $75. I’d look for it to hold $71 to try and get back to $83 and if it can get through that level then $90 is on the table.
DXY: The US Dollar took a plunge this week tested more lows of 100, which was confirmed by the PCE and GDP data (dollar getting weaker). Lower the DXY number the weaker the dollar and vice versa.
Crypto Charts
Since you have the major levels on the daily, I want to look at the hourly charts. I also want to give you the chart without any information on it and then a marked up chart and what I’m looking for in these charts. Again I’ll always go over $BTC and $ETH and then pick a couple of other coins to look at.
Some ideas in these charts I wanted to define:
FVG - Fair Value Gap. The technical definition of a FVG is when there are three consecutive candles and there is a gap between the wicks which causes an imbalance.
FVG Example
Range Point of Control - This is the point of control of the range. The point of control is where the most volume is being traded.
$BTC
$BTC Naked Chart Hourly
$BTC with zones
Summary:
$BTC previous week was bearish as we actually talked about seeing a pullback in the previous newsletter. That Market Cipher red dot really played out. This week $BTC roared back to try an break $30k but it couldn’t. The drop from the previous week created an imbalance (Fair Value Gap) and you can see where $BTC went and retested this area this week.
Points of interest short term:
Upside
$30k - Plan and simple need to break the FVG fill zone and hold it as support to move up and test the protected high.
Downside
$28.8k - I want to see BTC hold this S/R flip zone, but if it doesn’t then I’d look at $28k (range point of control) and $26.9k (the low in this range).
Points of interest in the long run:
I expect BTC to retest the $25.2k since that imbalance hasn’t been filled. I still think we test $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?
On the hourly we are in the green money flow which means money is still coming into the asset. The RSIs are close and tight and the VWAP is above the zero line. If BTC puts in a lower trigger wave, then I’d look for the pull back down to the range POC and the lows.
$ETH
$ETH Naked Chart
$ETH with zones
Summary:
Like $BTC, $ETH was due for a pullback the previous week and we did get one all the way down below $1800. $ETH swept the highs in the $2100 and reversed to trap the late longers. This caused a nice FVG within the chart and the interesting thing is that $BTC filled the FVG, but $ETH has yet to fill its FVG.
Points of interest short term:
Upside
$1950 - Plain and simple, $ETH needs to reclaim this area in order to move up to fill the FVG at $2060.
Downside
$1845 - This is an old S/R flip area that I’d look at some support. If it doesn’t hold then we will go and retest the lows of the range.
Points of interest in the long run:
Long term bias has not changed here. 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 where the money flow is green and we have a downside anchor wave being put in. The RSIs are split and so we might have a rests to of that $1920 to $1950 range and if we cannot break it then we will see a lower trigger wave above the 0 line and money flow turning from green to red for a pullback.
I wanted to leave it to $BTC and $ETH since it is Friday and will give you more of an insight when the next newsletter comes out on Monday morning for some other coins.
What Am I Currently Reading?
I’m currently reading The Wyckoff Methodology in Depth by Ruben Villahermosa Chaves. Yes this is still the same book and I’m nearing the end of it. One of the most useful concepts in the book is the fake breakout which goes in depth how to spot one on the chart and how to use this in your trading strategy. Its one of the easiest ways to stop a reversal.
Picture of the week:
This is our dog Oslo enjoying some time outside. He is a Bernese Mountain Dog and a Poodle mixed.
