The cryptocurrency markets have been a bloodbath the past month. It looked like we might start an uptrend back to highs in February and in the beginning of March, but Bitcoin couldn’t hold over the psychological 10k mark. Ethereum and most other altcoins are getting absolutely hammered as well. When we got under the 2/25 low, the continuation of the downtrend in BTC was confirmed. But there is still money to be made in the cryptocurrency markets. We have had huge success shorting BTC and ETH, and trading other altcoins like BNB that have shown serious relative strength in the crypto markets. Here’s a recent webinar where I share all my thoughts on the current cryptocurrency market conditions.
Still No Trend Change In Bitcoin
Every time we see any sort of bounce in Bitcoin, crypto social media becomes flooded with bullish sentiment. “Bear trap”, breaking out of the “falling wedge” on the 27-minute chart, and a ton of other biased technical analysis is seen all over the place. In trading, you have to trade what you see, not what you hope. The reality is Bitcoin is still in a downtrend on the higher time frames, and every bounce should be viewed as a selling opportunity.
If you are a long-term investor and believe that Bitcoin will be trading at $100,000 someday, then you will obviously view these prices as a huge buying opportunity. But you have to understand that Bitcoin may trade much lower in the near future. Whatever you decide to invest in, you have to know what time frame you expect your investment to finally start working and have a trading plan. The majority of retail investors who bought Bitcoin last year claimed to be fundamental believers in Bitcoin, but they panic sold this year.
Recent Failed Bounce Trapped Even More Longs
The recent bounce we saw in early February seemed to have brought in a fresh round of bag holders into BTC. Everyone seemed convinced that Bitcoin was heading back to all-time highs. Unfortunately in trading, when everyone takes the same side of a trade, it never works out. Trading is a zero-sum game, meaning behind every transaction in the markets there is a winner and a loser (depending on the time horizon of your buy or sell).
Bitcoin will need a lot of time to work out all the weak hands before it can resume its uptrend on the higher time frames. If it does start to resume an uptrend, it will not go straight up like it did last year back to 20k. It has a ton of levels of supply to get through, and it will not be an overnight process. Look what happened to Bitcoin in 2013:
You can see we saw a similar percentage move as we did in 2017. In 2013 it went from $100 to over $1000 per coin in around 2 months. Also, notice what happened after this big move. You saw a huge retracement from the parabolic move, getting back to as low as the mid 300’s at some points. It could recover like it did last time, but it will take many months/years to do so.
BNB One of the Strongest Altcoins Now
In weak markets like the crypto markets now, you should always be paying attention to coins that are demonstrating relative strength to their peers. BNB, Binance coin, has been the standout coin in the past few weeks. It has been maintaining an uptrend on its daily chart, in spite of the major weakness in Bitcoin and other altcoins. We have had several big trades on this coin in the past few weeks. Here is a recap of a recent trade we took in BNB, showing you how to trade altcoins to the long side in the current market conditions.
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