Bitcoin and Crypto Market Updates (May 1st)
This is the week!
A massive week for markets — On the agenda we have:
- Tuesday: AMD Earnings
- Wednesday: Powell / FOMC
- Thursday — AAPL Earnings
AMD is super important due to the majority of this year’s rally in legacy coming from the chips sector. So chip names have a lot to prove — Risks are weighted to the downside, particularly after that Samsung report highlighting chip demand had fallen off a cliff.
Wednesday’s FOM is super important… The market has priced a 25 hike and bulls will be looking for signalling of a pause or cut in the near future. If Powell shuts the door on cuts or a pause then the market’s going to have a negative reaction. We will dive deeper into the event Wednesday morning.
AAPL needs a stellar report. AAPL is basically helping the entire market remain stable right now with the huge weight it carries on indexes. If AAPL can pull it out of the bag and report a really strong quarter with ok future guidance then the market rally continues. Without this… it’s going to be painful for the Bulls.
This all comes with crypto in a tricky spot here and I only need to look at 3 charts here.
BTC.D (BTC DOM) — I keep highlighting this chart and there’s a good reason. We’re back at the top of the range here MA’s crossing over. What we really want to see is DOM reject up here… WHILE BTC consolidates around these levels.
What we REALLY DON’T want to see is DOM breakout to the upside while BTC ranges or shows signs of weakness.
USDT.D — Has found support at the mid-level here and I’m now concerned about this ABC pattern playing out. If USDT.D shows signs of bullish price action that’s not a good look for the whole sector. Bullish if we can get a move below the mid and we see that support zone fail.
BTC — Short that we shared is working nicely — BTC needs to simply break above the zone to give us more upside. A break below the support starts to look like a H+S topping pattern and that’s not good and will confirm a 25k test.
Just some thoughts/observations — Crypto is acting like a legacy here. Large-cap legacy stocks are leading the upside charge. In the Crypto world, BTC is leading the charge. In both markets, small caps are lagging…. For legacy markets, this isn’t typically what you see when bottoms are formed so I maintain my bearish legacy market view although it does look like we get some further upside.
PayPal announces Venmo crypto transfers, coming in May
PayPal has announced that Venmo customers will soon be able to transfer crypto natively on the app and to move their digital assets to external wallets and exchanges. PayPal has said that this feature will be coming “over the coming weeks starting in May 2023.” Venmo will accept four cryptocurrencies, namely Bitcoin, ether, litecoin, and bitcoin cash. PayPal’s general manager for blockchain, crypto, and digital currencies, Jose Fernandez da Ponte, said that he welcomes competition from other companies that offer fiat-to-crypto on-ramps, such as MoonPay and Robinhood Connect.
Hong Kong fund managers target crypto
Hong Kong is seeing an increase in interest from fund managers seeking to manage crypto assets for their clients, with around 10 managers having already upgraded their licenses to manage crypto. The Securities and Futures Commission’s recent guidance has made licensing upgrades smoother and shorter, making the process more attractive to fund managers. Local regulators have indicated their willingness to cooperate with the local crypto sector, and the government has pledged to grow the sector. Despite some restrictions on digital asset funds, Hong Kong appears to be positioning itself as a competitive virtual asset hub in the Asia region.
Visa hiring more crypto developers to drive adoption
Visa is hiring backend developers with experience in public blockchains and stablecoins to drive mainstream adoption of the technologies. The company is looking for developers who have worked with AI-assisted engineering tools like Github Copilot to develop and debug smart contracts. Visa prefers candidates with experience in testing frameworks such as Truffle, Mocha, and Hardhat and a good understanding of Layer-1 and Layer-2 solutions, Solidity, distributed ledger technology, and security protocols. In February, Visa denied reports that it would halt its crypto activities after high-profile company collapses. Visa set up an advisory unit to explore opportunities in the crypto space, while its rival Mastercard flagged intent to adopt crypto on its payment network.
Is Deloitte jumping headfirst into crypto?
Interestingly, Visa aren’t the only ones betting on crypto. Deloitte is apparently leading the pack among the “Big Four” accounting firms in terms of crypto-related job openings. A recent search on LinkedIn for crypto jobs based in the US shows 331 available roles at Deloitte, including titles such as Blockchain & Digital Assets Manager and Tax Manager, Blockchain & Cryptocurrency. In comparison, Ernst & Young, KPMG and PricewaterhouseCoopers have zero results for crypto-related listings. Deloitte continues to work with crypto firms, with Circle hiring them in January 2023 to audit its proof-of-reserves. Deloitte’s job listing for “Blockchain & Digital Assets Manager” indicates that applicants will lead teams to provide audit readiness for blockchain and digital asset transactions.
Apple remove Bitcoin White Paper
Apple has removed the Bitcoin white paper from its beta version of MacOS Ventura 13.4, the latest operating system update. The paper had been deeply embedded in some older versions of the operating system and was discovered by blogger Andy Baio in April. Most users won’t have access to the latest beta version yet, so they can still find the file by executing a command in Terminal or unpacking the contents of a hidden file. The discovery of the hidden white paper prompted speculation about the identity of Satoshi Nakamoto, which would make for an excellent conspiracy theory.
Dealing with the Stop Loss
Trading is not just about making profits, but also about managing risks. One of the most important tools that you as a trader should use to manage risks is the stop loss (SL). The SL is a predetermined level to exit a trade in the event of adverse price movements. While the SL is crucial for managing risks, it can also present psychological challenges for traders.
The Necessity of Using SL
The SL is essential for protecting you from significant losses and crucial for preserving your capital. Without an SL, your account can quickly become depleted in the event of adverse price movements. An SL allows you to limit potential losses and adhere to your risk management plan. By limiting losses, usually, the emotional and psychological impact of thinking about trading losses is reduced.
Risk Management Tool
The SL is a critical risk management tool to manage positions. There are various approaches to determine the placement of the SL, such as using technical analysis to identify key support and resistance levels, volatility-based strategies, or based on the risk appetite, ideally a balanced combination of those aspects. Whatever the approach, the SL must be placed at a level that provides a reasonable exit point and minimizes potential losses.
Invalidation and SL Placement
Traders must understand the concept of invalidation when placing their SL. Invalidation is the point (or price) at which the original trade idea is no longer valid. When this happens, it may be time to exit the trade, even if the SL has not been triggered. You should be able to recognize invalidation points to avoid staying in a losing trade for too long. There is a good quote that says “Cut Your Losses Fast and Let Your Profits Run Hard”; SL comes in the 1st half of it.
Mindset and Psychology
While the SL is a valuable tool for managing risks, it can also present psychological challenges for you as a trader. For example, some traders may experience anxiety or frustration when their SL is triggered, even if it is for their own good. Traders must learn to manage their emotions and understand that losses are part of trading, it’s just not possible to win every trade, and the best you can do is manage well those that you lose.
It’s incredibly helpful to have a growth mindset and understand that trading is a long journey of learning and development. Instead of focusing on losses, focus on the process, such as sticking to a risk management plan, analyzing and journaling trades, and continuously improving and refining skills.
In conclusion, the Stop Loss is a critical tool for managing risks in trading. You as a trader must understand the necessity of using an SL and use it in conjunction with other risk management tools. The concept of invalidation is crucial and the placement of the SL should be done accordingly. Lastly, every trader should be able to manage his emotions and maintain a growth mindset to overcome the psychological challenges of using an SL in trading.