Bitcoin and Crypto Market Updates (May 29th)

Debt deal gives risk assets a push!

Over the weekend Biden and McCarthy were able to reach a deal on raising the debt ceiling. The deal must now move to Congress for a vote before the 5^th of June to avoid a default.

Over the weekend bitcoin was able to push back above the key resistance level of 27k. We now need to see this level flipped as support to confirm continued upside.

All eyes are on the ETH/BTC chart this week to see if we can push through the key resistance zone. If we can do this then we could finally see Alts getting a bid.

We get additional confluence if the USDT.D chart loses the mid-level so this is another key chart to watch this week.

The AI hype continues with large-cap tech helping to push markets higher. My index that tracks AAPL, NVDA, MSFT, AMAZON, TESLA, GOOGLE, META and AMD shows we could still push further into the 78% Fib retracement level.

Looking at the history of asset bubbles it shows AI is still just a ‘’Baby bubble for now’’ with more upside left in the tank.

Deep fake AI image wipes $500 Billion off S&P 500

The financial markets experienced a significant dip when an AI-generated image depicting an explosion at the U.S. Pentagon circulated on Twitter. The convincing image led to multiple breaking news accounts sharing it, causing the S&P 500 to drop 30 points within minutes. However, once it became clear that the image was a deep fake, the market rebounded. The incident highlights the need for AI regulation, as emphasized by Genevieve Roch-Decter, who pointed out the potential consequences of such misinformation.

Nvidia becomes a Trillion dollar company

Nvidia's stock has surged, putting the company on the verge of joining the trillion-dollar valuation club. The share price soared by 24% following an impressive earnings report that surpassed expectations. Nvidia's leading position as an AI chip supplier, along with its projected $11 billion in sales for the current period, contributed to the stock's rise. This puts Nvidia within reach of a valuation achieved by only a handful of companies. Analysts quickly raised their price targets, with JPMorgan doubling its target to $500. While Nvidia's meteoric rise stands out, other chipmakers like Intel and AMD have not experienced the same level of growth. Nvidia's shares are up 160.6% year-to-date.

Hardware Wallet Ledger delays launch of new product after backlash

Ledger, the cryptocurrency wallet provider, has decided to delay the release of its Recover service following public backlash and concerns. In an open letter, Ledger's CEO acknowledged a communication mistake that caused confusion among consumers. The company plans to prioritize the release of the Ledger Recover white paper, which will outline the service's functionality and security measures. Ledger also announced its intention to make the code open source, allowing users to implement their own shard backup providers. The company aims to ensure transparency and provide users with the option to maintain self-custody over their digital assets. Ledger hosted a town hall to address customer concerns and clarify future plans for Ledger Recover.

Web3 raised $151 million last week alone… Worldcoin taking centre stage

In the world of crypto funding, this week saw over $151 million raised by approximately 12 startups, with a focus on Web3 development, particularly in the gaming sector. Openfort secured $3 million in a seed round led by Gumi Cryptos Capital and Maven 11 to further develop its wallet-as-a-service product for Web3 gaming. Another standout was Pomerium, a Web3 game developer, which received a $20 million investment in an angel round. Notably, Worldcoin, a blockchain-based financial and identity network co-founded by Sam Altman, raised a substantial $115 million in a Series C round, with participation from Blockchain Capital and a16z. Other significant fundraises included Semafor, which raised $19 million, LabDAO with $3.6 million, Sort with $3.5 million, and Num Finance with $1.5 million.

Enhancing Trading Strategies with ChatGPT

In the fast-paced world of trading, staying ahead of the game requires constant innovation and adaptation. One such innovation is the utilization of artificial intelligence (AI) in trading strategies. This article explores how ChatGPT, an advanced AI language model, can be harnessed to enhance trading strategies and decision-making processes. Discover the exciting possibilities that ChatGPT brings to the world of trading.

As an appetiser to this article check out this capture of a real conversation between the AI and myself earlier today.

See the full conversation below:

ChatGPT

Absolutely! Technical analysis is an important aspect of trading. One effective approach is to learn and utilize various indicators available on platforms like TradingView. These indicators can provide valuable insights into market trends, momentum, and potential reversals. I can help you create custom indicators based on your specific requirements and preferences.

Popular trend-following indicators include moving averages, such as the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). These indicators help identify the overall direction of a trend. Additionally, oscillators like the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) can provide indications of overbought or oversold conditions. Let's work together to create custom variations of these indicators that align with your trading strategy.

Volume analysis can provide insights into the strength of price movements. For example, the Volume Weighted Average Price (VWAP) indicator can help identify the average price at which an asset is traded throughout the day, providing a reference point for determining whether a trade is being executed at a favorable price. We can customize and integrate volume indicators into your preferred charting platform to assist you in analyzing volume patterns.

Great! To poceed, please provide me with specific details about your trading strategy, preferred timeframes, and any additional parameters you would like to incorporate into the indicators. I will then work on creating custom scripts for these indicators that you can use in TradingView or other compatible platforms. Remember, it's important to backtest and validate any indicators before using them in live trading.

You're welcome, Agroman19! Take your time, and whenever you're ready, feel free to reach out with the details. I'll be here to help you throughout the process. Let's work together to improve your trading performance and achieve your goals.

This is just the tip of the iceberg, but I’m sure it gives you an idea of how you can use the power of AI to your advantage, just like we have been commenting on in previous entries of the newsletter for Algo Trading.

Here are some tips for chatGPT that I have used myself recently.

Technical Analysis Reinvented:

Traditional technical analysis often requires a manual interpretation of charts and indicators. ChatGPT revolutionizes this process by assisting traders in developing custom indicators tailored to their specific needs. By leveraging ChatGPT's capabilities, traders can create and backtest indicators, such as trend-following indicators and volume analysis tools, to gain valuable insights into market trends and dynamics.

Intelligent Trade Ideas:

Finding profitable trade ideas can be a daunting task. ChatGPT acts as a virtual trading assistant, offering insights and suggestions based on market data and historical patterns. By engaging in conversations with ChatGPT, traders can explore new perspectives, discover potential entry and exit points, and identify emerging trading opportunities.

Risk Management Optimization:

Effective risk management is crucial for sustainable trading success. ChatGPT can assist traders in optimising their risk management strategies. By analyzing historical data and market conditions, ChatGPT can provide guidance on setting appropriate stop-loss levels, determining position sizes, and implementing risk mitigation techniques to protect capital and minimize losses.

Backtesting and Strategy Validation:

Validating trading strategies through rigorous backtesting is essential. ChatGPT can help traders design and implement backtesting frameworks to evaluate the performance of their strategies. By simulating trades based on historical data, traders can gain insights into strategy effectiveness, identify potential pitfalls, and refine their approach for improved performance.

Integrating Human Expertise:

While ChatGPT offers valuable insights, it's important to remember that human expertise and intuition play a vital role in trading. By combining the power of ChatGPT with human intelligence, traders can achieve a symbiotic relationship that leverages the strengths of both AI and human analysis.

Conclusion:

As the trading landscape continues to evolve, embracing the potential of artificial intelligence becomes crucial. ChatGPT empowers traders by offering new perspectives, generating trade ideas, and optimising risk management strategies. However, it's essential to remember that AI should augment human decision-making, not replace it. By harnessing the power of ChatGPT and integrating it with your trading expertise, you can unlock new horizons and gain a competitive edge in the ever-changing world of trading.