Crypto markets continue to stew in the wake of the FTX fallout, and the prevalent "risk off" investor sentiment as the FED continues to wage war against record high inflation. The crypto market in 2022 has felt very much alike to that of 2018--which for those of you that weren't around, it was just a giant suckfest everyday. Coins that had promising futures and strong narratives were down 70% and felt like a bargain. Weeks later those would go down another 40%. You can tell yourself you're gonna "Buy it 'till it acts right" but one day you just get tired of waking up to your shit down 35% for the 12th time. This was also when I created my profile image. I was still trading in GDAX at the time. While I was never bearish, I did feel utterly defeated every single day for an entire year. I left the picture as a reminder of that year, to help keep my exposure in check when trading and take profits when possible.
Anyways, getting back to today's markets. When everything keeps bouncing lower off a downward trendline, it seems like a coin toss (no pun intended) as to whether any of these dead cat bounces are worth riding as we look to establish long term price support. I've seen promising weekly MACD bullish crosses get obliterated, on both USD and BTC pairs. So I tend to avoid trading based off those in this kind of market. RSI for me has been a better way to trade but the key is to find a coin with a decent amount of price history, volume, and narrative. There's two types of bullish RSI trades I like. One is having cash on the sideline for when BTC just nukes and prints a -25% candle. Alts will be down 40-50% and you can scrape the bottom. These daily candles almost always close down somewhere in the -16 to -24%, so you can make a good bit of money in a day off someone else's liquidations. The other kind is based off historical RSI reversal levels as seen in the FLOW chart attached. Down almost 91% YTD, and around 32% in the last few weeks. The daily RSI is around 15, which historically has led to rallies over 50% in the days following. What's impressive, and a bit unnerving, is that this has occurred 100% of the time this happens. There's not a single instance where RSI hits 15-16 and doesn't rally. And all the rallies I highlighted were just measured up to the first correction. Many of these rallies off this low point continued much higher, I just wanted to point out the safest exit was still a pretty nice move. The daily bollinger bands leave the door open to around .96-$1.00. I'm not saying it's a slam dunk or a no-brainer, but you've at least got some rationale behind the trade setup. Either way please remember this is not financial advice or recommendations, I just thought it was interesting and wanted to share. Be safe out there and keep your heads on straight.
Anyways, getting back to today's markets. When everything keeps bouncing lower off a downward trendline, it seems like a coin toss (no pun intended) as to whether any of these dead cat bounces are worth riding as we look to establish long term price support. I've seen promising weekly MACD bullish crosses get obliterated, on both USD and BTC pairs. So I tend to avoid trading based off those in this kind of market. RSI for me has been a better way to trade but the key is to find a coin with a decent amount of price history, volume, and narrative. There's two types of bullish RSI trades I like. One is having cash on the sideline for when BTC just nukes and prints a -25% candle. Alts will be down 40-50% and you can scrape the bottom. These daily candles almost always close down somewhere in the -16 to -24%, so you can make a good bit of money in a day off someone else's liquidations. The other kind is based off historical RSI reversal levels as seen in the FLOW chart attached. Down almost 91% YTD, and around 32% in the last few weeks. The daily RSI is around 15, which historically has led to rallies over 50% in the days following. What's impressive, and a bit unnerving, is that this has occurred 100% of the time this happens. There's not a single instance where RSI hits 15-16 and doesn't rally. And all the rallies I highlighted were just measured up to the first correction. Many of these rallies off this low point continued much higher, I just wanted to point out the safest exit was still a pretty nice move. The daily bollinger bands leave the door open to around .96-$1.00. I'm not saying it's a slam dunk or a no-brainer, but you've at least got some rationale behind the trade setup. Either way please remember this is not financial advice or recommendations, I just thought it was interesting and wanted to share. Be safe out there and keep your heads on straight.