Crypto Update : Important Technical Analysis

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Avatar for Bitman007
3 years ago

Be long in the face of adversity... Trading Crypto with Swing Trader

Over the weekend, ETH was literally getting taken to the slaughterhouse, down almost $100 at one point. DeFi tokens also getting smoked (no surprise, what goes up must come down eventually). On the other hand, BTC was holding up relatively well, trading above the $10K level. With the current weakness, puts were the flavour of the week, resulting in implied volatility spiking; ETH > 100% and BTC close to 70% for 1-month. I'm actually thinking that it could be a great opportunity to start accumulating BTC or ETH at these levels. Check these out: 

BTC

Sell 4-day 9.5K puts for 35% annualized

Sell 4-day 9.75K puts for 70% annualized

ETH

Sell 4-day $280 puts for 20% annualized

Sell 4-day $300 puts for 35% annualized

In macro land, we got U.S. CPI report, ECB rate decision, Brexit, UK GDP and China trade data this week. Quite a busy week but all eyes will still be on the tech sector. Though US equities rebounded somewhat on Friday after the sharp tech-led sell off, global indices still finished in the red for the second day. Narratives vary regarding what triggered the sell off, and there's no clear catalyst but suspected culprits continue to come from the algo, option/gamma (Softbank loading up billions of calls) or profit-taking camps. 

For me, I look at the big picture, monetary policy continues to remain ultra accommodative as Fed beats on the QE4eva drums and it is likely to remain like this for years. In a TINA world and PE ratio for U.S. 10 year treasury hovering around 150x, equities trading at 25x trailing (from earnings) still seems like a bargain. This is why I am still going to be long crypto and tech stocks here.

European equity indices are all in the green, S&P futures now turning flat on the day with Nasdaq gradually recovering. I am not sure about you, but when global sentiment feels like we may have bottomed, I think BTC is a buy here when it's down unjustifably by -1.5% on the day.

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3 years ago

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