- Bitcoin New Highs Plus Possible $1.1B BTC Dump
- Last Week In The Forex Markets
- Top 3 Pairs For Next Week
- NEWSFLASH: Bond Yields Rise Again
With this huge interest in Cryptocurrency over the last 12 months, it goes without saying everybody would have heard about Bitcoin on TV or from a family member.
Amazingly what started back in 2009, with the majority of investors not wanting to go near this for being confused on how cryptography and the blockchain worked. But as of this year, we have witnessed price hit new highs, reaching $61,788 per BTC.
Some of you may be holding BTC and for the foreseeable future, it would be worth keeping as long as it's an investment that won't ruin your savings.
But for the investors or miners who got in early and hoarded coins away or even the big players with millions of dollars at their disposal.
Here's a cool list that outlines the hierarchy of BTC holders:
Now I think it's safe to say that unless you hoarded BTC in the early days or have millions at your disposal we all most likely fall somewhere below 'Fish'.
So the real players in this game are the 'Sharks', 'Whales', and 'Humpback Whales', these guys have huge leverage over the markets, and since the spike and drop in 2017 they have been buying i back all the Bitcoin they can from the lower levels of the BTC holders hierarchy.
You may be wondering why I have just explained this to you, this is crucial to understand so we can see how volatile these markets can be and also how controlled they can be.
Lets take a look at the decline we saw.
It has been reported that the BTC pullback was accelerated when a transaction of 18,961 Bitcoin ($1.1Billion) was made to the Gemini Bitcoin exchange based in New York run by twins Tyler and Cameron Winklevoss.
As we can see this had a huge effect on the market pushing down just under 14%.
Typically most Cryptocurrency traders will use huge transactions like this as a sell signal, usually, this signifies 'Whale' or a 'Humpback Whale' is about to sell off their BTC. It also can start a trend or frenzy of people rushing to sell their coins as they feel something is about to happen.
So it is likely we may see huge amounts of BTC be sold back to fiat currencies soon, or this is just another way for those big players to snatch up all the remaining coins, only time will tell.
So what next? Well, it's hard to say, with the whole crypto market being so volatile it could go either way but for those who have investments as always keep a close eye on them and do due diligence.
With the markets seeing a slow start to the week but on Wednesday we saw a lot of big moves on the DXY causing a shock wave in the markets, lets take a look.
EURUSD: [Break Even]
This is a trade which we took and was sent out to our TST Pro Members.
EURUSD has been messing us around for the last week, we had a nice impulsive push last week which unfortunately got taken out for break even.
Later in the week, we saw the same story with the DXY pushing on Wednesday after the Monetary Policy Update.
Taken off a 78.6% fib level and a 1,2,3 of the dynamic trend line this is how we were looking to capitalize on the pullback but unfortunately, this didn't happen.
AUDUSD: [Missed Trade]
This one has been eyed up in the Pro Community for several weeks now, we are looking at a longer-term play on the $$$ weakness.
But due to the markets not giving us much to follow in those final moments before the impulsive leg this was one that we missed due to the tricky trading conditions.
We were expecting a retest of the highlighted levels but we did not see that and it rocketed to the upside.
GBPNZD was on our watchlist this week, after making a somewhat slow push up in an ascending channel this week we finally saw it tap the bottom of the structure.
This not being too easy to catch we caught the move after it came back down to gather more orders before rocketing to the upside
Using a Fibonacci level and intuition there was a scale in a position that presented itself shortly after the first impulsive leg.
Well done to those that caught this one.
Every Saturday we send a 'Market Breakdown' to our Pro Members.
Here we are looking at EURJPY, we see a larger daily ascending channel in play.
We have come into the markets on a lower time frame (1H). Here we can see price is correctively forming into an ascending channel to complete our larger pattern.
But we can capitalise on both a Long & Short position here.
Firstly taking the Long from the level of market structure below current price.
Second taking the Short from the top of our ascending channel, giving us two great trading opportunities for next week.
If price is pushing up impulsively to AOI then do not enter, wait for clarity on this move.
Many of us last week may have had some frustrating moments on this pair, I know I certainly did after taking several break evens before a huge impulse caused by the FOMC.
But this week we are anticipating the pair to follow a downwards trend into a double bottom, gathering more orders and then seeing that impulsive leg we have been looking at on this pair.
We have two profit targets, the first being 1.19915 level which is has a strong level of selling pressure. The second target is 1.20525 level.
As always be cautious on this pair and expect some manipulation and harsh spikes, but still goes without saying this could be a huge trade this year.
Taking a look at this pair we can see we've been making a series of lower lows and lower highs.
But as of the FOMC and sudden but preempted drop in the $$$ we saw a break of the previous high.
So as always this is where we should be looking to trade the continuation pattern, as we can see we have a somewhat falling wedge. Combined with a Fibonacci level we can identify the 71% fib level as being a highly probable area this trade will go from.
Targets here being the double top region at 0.97966
As always lets wait for the right development on these pairs and execute with confidence.
Wednesday Monetary Policy update saw Chairman Jerome Powell showing not much immediate concern toward rising Bonds Yields.
We discussed in last week's newsflash stating oil had reached old highs, as we had seen this week oil took a huge dip, USOIL nearly falling 8%, and the global oil benchmark Brent crude was down more than 8% at $62.31 per barrel.
Following the trend, we see the S&P 500 (SPX) ended down 1.5%, and the tech-orientated Nasdaq Composite (COMP) fell 3%.
So what does this mean, well Business Insider did an interview with Scott Thiel, here's what he said on the effect on stock prices:
"Firstly, he says "the most important thing to think about" is that bond yields and inflation are key factors in judging what companies are worth.
If borrowing rates and inflation look likely to stay low for a long time, then the returns and earnings of stocks become more attractive. Lower interest rates also hold down companies' borrowing costs.
Low rates, therefore, caused a surge in the shares of fast-growing, high-earning companies like Amazon, Apple, and Google, helping the Nasdaq soar more than 80% since its March 2020 lows.
But Thiel says: "If you shift that dramatically, in a very short period of time, and imply that that may be just the beginning of rate increases, you can have a situation where equity markets don't like that very much at all."
Another thing to think about is the sudden flood in stimulus cheques. After the stimulus cheques have been put into the American economy will have 40% more dollars in circulation than before the pandemic, this could be detrimental concerning hyperinflation to the dollar.
In turn, should we be worried? Somewhat a bit of both, we don't need to burst into all-out chaos but we should be more cautious about what we spend our money on and where we place it to grow.
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We thank you for reading this week's addition to the TST Newsletter, have a great trading week, and stay consistent. – 'The Social Traders Team'