As mentioned in episode #12, I was going to be late this week and only post on Wednesday. Some could think, Week #13, maybe better to skip it ;) Nonetheless as promised I will give a quick overview of what is still to come this week and my general outlook for Bitcoin in April.
EU Parliament vote
Key event for crypto market this week comes from EU, after they struggled to decide recently what to do with Proof of Work, this time they are trying make everyone’s lives complicated by trying to pass an anti-money laundering legislation targeting crypto transfers with “unhosted wallets” (cold and hot wallets), implying a need to limit illicit money entering a regulated financial system, forgetting the key advantage of blockchain is its transparency and that vast majority of money laundering happens with cash!
This takes place on Thursday 31st, so keep an eye out for the outcome as it could seriously rattle the market.
If this is passed, exchanges will have to collect personal data for all transactions with unhosted wallets and report all crypto transfers over 1000€ from those wallets to ALM authorities even if there is no suspicion of money laundering. This most likely will mean that the likes of centralized exchanges will just cease to allow their users to send their crypto for example to a cold storage like Ledger, rather than go through the laborious process of verifying all that data. For those new to digital asset space, it is like your bank would not let you withdraw your cash unless you provided exact details of which drawer and sock color you are planning to put your money in for safekeeping.
What’s BTC up to
As I was writing Week #12 episode early during US trading session, everything pointed to another bounce lower from key areas we were on several charts on 18th of March. As you can see on TOTAL2 example (chart for all crypto combined except Bitcoin) we had a breakout from a steady down trend on Daily time-frame that got as far up as 200 moving average.
As expected, 99% of crypto YouTubers jumped on those moves to claim Bull run is back and BTC is going to 100k “tomorrow”. While this is a positive sign for all hodlers, the move looks to be just a relief bounce that was expected at some point, although probably not so soon considering Ukraine conflict and only rising costs of living, supply issues growing and coming interest rate hikes in May.
Mainly because that rally up on both equities and in turn digital assets markets was quite strong despite all the above negative macro and geopolitical data, I think what is most likely to come next will hurt short term traders that did not take profits even more than Nov/Dec 2021.
Technical setup lines up with the overbought/overvalued feel for crypto in general and as you can see confirmed with RSI and Wave oscillators above. While a break above 200MA is not impossible as markets react to any remote hope for peace in Ukraine, the most likely scenario in April is a move down as we get more data including this week’s NFP and mid April CPI (Inflation) data from US, all leading to 4th of May FEDs meeting and interest rates decision.
If you remember my advice on how to improve your DCA you will know considering BTC’s F&G index being above 55 (got as high as 60 last week) and RSI well above 70, this is NOT the time to buy.
Resist your urges to buy and do not FOMO even if Bitcoin touches on 50k
That’s it from me this week. I will be back this weekend with a regular newsletter format where apart from weekly market overview you will find out:
What is Mcap and why your favourite cheap altcoin will never cost 1$
What are stablecoins and different types
Any feedback/comments welcomed as always!
Week #13
Just received and read my first newsletter, thank you. Great insights and comments. I was so close to pouring more funds into BTC yesterday, then I read this :)
In a matter of 8-9 months I have realized what fomo means with bad trades (looking at you, AAVE 😅). Now I have layered out a portion of my trading portfolio and waiting on cash for any moves downward. If it pumps further I get even more ready for the pullback ✨💪🔥 no more just a HODLer.