Bitcoin and Crypto Market Updates (July 10th)
M is for… Massacre?
Today we will mainly be focussing on the Legacy Market side as BTC prices remain relatively unchanged, in addition, we also had some interesting market action on Friday that’s worth calling out so let’s get into it.
Starting with SPX — And this is a similar look to all the other major indexes. We now have this ‘’M’’ formation WITH bearish divergence. This is a typical topping formation and needs to be taken very seriously as we head into this week.
When we focus on tech we’ve also hit a key 78.6% retracement level on the fibs. Again this is another key reversal level to watch out for.
Last week we also had jobs and wages data and quite honestly I don’t know what to make of it, jobs up in one area… down in another. Almost impossible to read but we did have wages UP and this doesn’t help Powell’s case for fighting inflation.
So what happened Friday? The day was super volatile and got off to a great start, everything was green and then boom, right before the close everything reversed and the indexes actually ended red. It was very quick and felt like a bit of a warning sign for what was to come.
And finally, one piece I wanted to finish on is the conversations im having with friends at the moment. Two friends specifically. This might look/sound stupid but I think it’s really relevant right now as it’s ‘’actual on-the-ground conversations’’ and this is what TRULY matters when it’s all said and done folks. Not AI ‘’hype’’ and bullshit mania.
FRIEND 1 — Works for one of the largest staffing providers globally — Key clients are mainly in the financial services sector (HSBC being the biggest). The conversations that are happening in this business right now are ‘’we need to cut more people, we need to make redundancies’’ — So a major slowdown in growth and expected growth.
The spending of this business is all CLIENT SPECIFIC — So if clients aren’t growing… this business suffers. I also quizzed him about AI and he told me there are loads of conversations going on, a big buzz but in terms of actual spending on this tech… that hasn’t happened yet. Clients are still very much in the ‘’Discovery phase’’ — It will be BIG business but not quite yet.
FRIEND 2 — Family owns one of the largest home builders in the UK — over a 16 Million pound loss projected for this year… expenses, materials, EVERYTHING this business needs to be profitable is working against them.
Competitions are starting to blow up and there’s currently no end in sight as of yet.
Two different conversations, two different industries, one is UK specific but another is more global BUT both are suffering. I’d be really keen to hear about conversations other people are having right now so hit me up in the discord!
For me, it really underpins the true state we are in on a global level and when you look at headlines like this one — Top 7 US stocks have a combined market cap of 11 Trillion (triple Germany’s GDP), it tells me something is really off here.
BlackRock CEO Calls Bitcoin “Digital Gold” Live on TV
BlackRock CEO Larry Fink recently discussed the firm’s application for a spot Bitcoin ETF during an interview with Fox Business. Fink expressed his goal of “democratizing” cryptocurrency by making it more accessible and affordable for investors. BlackRock’s proposed iShares Bitcoin Trust, in partnership with Coinbase, aims to reduce the high bid-ask spread associated with cryptocurrencies. Fink’s initial scepticism toward crypto has evolved, and he now sees bitcoin as a digital alternative to gold and an “international asset.” BlackRock’s focus on digital assets aligns with their emphasis on innovation.
Asset Manager Fidelity Also Targets Bitcoin ETF
Following BlackRock’s announcement, Fidelity has re-entered the race for a spot Bitcoin ETF. With $11 trillion in assets under administration, Fidelity filed for the Wise Origin Bitcoin Trust, entrusting Fidelity Digital Assets Services with Bitcoin custody. Although Fidelity’s previous attempt at a spot bitcoin ETF was blocked by the SEC, the company has been actively involved in the crypto space since 2018, offering custody and trade execution services. Fidelity’s renewed effort reflects their commitment to the growing digital asset market.
SEGA Steps Away from Crypto Gaming and Web3
Gaming veteran Sega has decided to pause its blockchain endeavours, expressing concerns about the devaluation of its content. Sega’s co-chief operating officer, Shuji Utsumi, stated that the company won’t be incorporating blockchain or crypto in its products in the near future and has suspended plans for blockchain-based games. Utsumi criticized the “boring” nature of play-to-earn games and questioned their fun factor. Sega will observe the potential success of blockchain products in the gaming industry before making further decisions. The company’s stance reflects concerns over over-commercialization, pay-to-win mechanics, technical issues, and limited accessibility in the blockchain gaming space.
Multichain in Trouble with $130M Lost and CEO Disappears
Multichain, a blockchain bridging service, has indefinitely suspended its operations following a suspected hack that resulted in the movement of a substantial amount of tokens to an unknown address. Users have been advised to stop using Multichain services and revoke any contract approvals. The exploit affected tokens such as wrapped bitcoin, USDC, DAI, ether, and chainlink, with estimated losses exceeding $130 million. Compounding the situation, Multichain’s CEO has been missing for over a month, raising speculation about internal issues. Multichain’s technology faced challenges, leading to stalled transactions and the suspension of token deposits by Binance. The situation remains unresolved, with users and the industry eagerly awaiting updates.
Binance Loses 3 Key Executives from the Company
Cryptocurrency firm Binance has experienced the departure of three executives amidst mounting legal investigations. The resignations come as the company faces lawsuits from US financial regulators and a reported Justice Department probe into allegations of money laundering and sanctions violations. While regulatory scrutiny and CEO Changpeng Zhao’s handling of the claims may have influenced the departures, the executives cited personal reasons for their decisions. Binance remains a major player in the crypto industry, and despite the changes, Zhao continues to be a central figure, supported by departing strategy chief Patrick Hillmann.
Mastering Support and Resistance Levels
Understanding support and resistance levels is a crucial aspect of technical analysis for traders. These levels provide valuable insights into price movements, potential reversal points, and areas of significant buying or selling interest.
What are S/R?
Support levels refer to price levels where buying interest is strong enough to prevent further price declines. On the other hand, resistance levels are areas where selling pressure becomes significant, causing the price to struggle in its upward movement. Identifying these levels helps traders anticipate potential reversals or breakout opportunities.
The most common kind of support and resistance zones are the horizontal ones, but diagonal S/R levels like trendlines are also widely used.
Methods to Identify Support and Resistance Levels:
- Swing Highs and Lows:
Analyze price charts to identify swing highs (peaks) and swing lows (troughs). These significant price levels often act as support and resistance areas. Connecting these points with trendlines helps visualize potential trading zones.
- Psychological Levels:
Psychological levels, such as round numbers or key price levels ending in 0 or 5 (e.g., $50 or $100), often attract attention from market participants and can serve as support or resistance zones.
- Moving Averages:
Moving averages, such as the 50-day or 200-day moving average, can act as dynamic support or resistance levels. When the price approaches these averages, it often encounters buying or selling pressure.
- Fibonacci Retracement Levels:
Fibonacci retracement levels, derived from the Fibonacci sequence, are popular tools to identify potential support and resistance levels. These levels, including 38.2%, 50%, and 61.8%, are drawn from significant price swings and can provide valuable insights for traders.
There are some Tools that can be used to assist in identifying Support and Resistance Levels:
- Fibonacci Retracement:
Utilize charting platforms that offer Fibonacci retracement tools. These tools automatically plot the key retracement levels based on the selected swing points, making it easier for you to identify potential support and resistance zones.
- Volume Analysis:
Consider analyzing trading volume at support and resistance levels. Increased volume during breakouts or bounces from these levels can validate their importance and provide additional confirmation.
- Volume profile and POC:
Point of Control (PoC) is the price level at which the greatest number of contracts have been traded within a volume profile. A volume profile is a charting tool that displays the amount of volume traded and the overall trading activity at each specific price level during a given period.
Mastering the identification of support and resistance levels is essential for successful trading. By understanding the significance of these levels and utilizing various techniques you can enhance your analysis and decision-making process. Remember to combine these techniques with other aspects of technical analysis, such as price action and volume analysis, for a comprehensive trading approach. With a well-developed understanding of support and resistance levels, you can start developing almost any trading strategy there is.