Welcome to our Weekly newsletter!

Key charts to watch this week… Also, bookmark the 10th This week – CPI day

BTC – Two key levels here at 22k and 20k… If we lose 20k I think we test the 18’s and possibly lower.

If we can break above 22k convincingly we stand a chance of going higher and I’ll be expecting to see around 25k.

USD – Everyone calling a top in this chart and I think it's premature until we see a break of 109 then 107. I’ve taken an inverse look below and this currently shows we are just in flag consolidation, and we should expect to see a test of 109 (upper bound) – then we should drop to 116. And this is where I’d say the USD has likely topped. If we can negate then that’s good news for markets… But not inflation XD – killer.

SPX – Key week from a momentum perspective. On the weekly chart, we want to see a MACD momentum cross and this would confirm bulls have gained control of the momentum and likely we see higher prices. If we don’t cross and reject this week then expect to see 3600 / lows being tested.

GLD – This will serve as a beautiful confirmation of a USD move. Ideally, we want to see USD negate and for GLD to break the LL LH structure. If we can do this in line with the USD collapsing then this sets us up nicely for a more sustained higher across risk assets.

I’ll do a separate CPI post in the Discord Group later in the week. Good luck!

FTX Contreversy… are they insolvent?

Never a dull day in crypto… but could we go one Sunday afternoon without the threat of industry-wide contagion events sending crypto back to the dark ages? Apparently not. Concerns around FTX and their FTT token have come to light concerning ‘alarming trends’ in the balance sheets of FTX, Alameda Research and other companies under the SBF umbrella. FTX Exchange and Alameda Research and inexplicably interlinked, not only by their shared found Samuel Bankman-Fried (SBF) but also by their intertwined financial balance sheets.

The accusation is that FTX is printing their native $FTT token, lending it to Alameda Research who can hold it on their inflated balance sheet, to borrow other assets such as USD against it and effectively print free money - the FTT altcoin being the only collateral. This is known as the ‘flywheel effect’ and effectively creates capital from leveraged illiquid collateral. This has brought about huge concerns of insolvency if FTX / Alameda Research has more liabilities than they have liquid assets to repay them. Be careful out there…

Binance to sell $2.1 Billion $FTT position

Following the revelations around FTX and Alameda Research as discussed above, the CEO of Binance, Changpeng Zhao (CZ) has revealed that they will be selling their entire FTT position due to “recent revelations which came to light”. The Binance boss stated that they will not liquidate their entire position immediately due to limited liquidity and to minimize the market impact - stating it may take some months to complete. Last night. Binance concluded the first of these sell orders selling 23M FTT ($584,818,174).

Interestingly it seems that financial concerns over FTX may not have been the only motivation for Binance to liquidate their FTT position, as another tweet from the CZ also stated “Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs”. This statement refers to actions taken by FTX whereby they apparently lobbied behind Binance’s back to damage the world's leading exchange privately. Ouch.

Instagram to allow users to mint, buy & sell NFTs

Meta has continued their Web3 drive with the latest announcement. Soon users will be able to mint NFTs and sell digital assets directly from the platform itself. Essentially Instagram will become an NFT marketplace, similar to the likes of OpenSea and comparable to what Reddit has done in recent months. The company said it would not charge any fees until 2024 and the NFTs would be fee-free to attract creators to “build for the metaverse” on the platform. This will be a way for creators to monetise their work and is undoubtedly a net positive for crypto and the NFT space in general.

Metamask integrating with Epic Games

Metamask has just announced they have been working with crypto project Hyper Play Gaming to bring Metamask Web3 wallets to every desktop game. HyperPlay will enable Metamask wallets to be integrated with ALL games launched on the Epic Games and GOG.com stores. This doesn’t just refer to crypto games but will eventually encompass all traditional game titles in the future as well. Users will be able to port their NFTs, Tokens, Wallets & Achievements into games in a move that seems to bring Web3 and Gaming closer. Epic Games are one of the most successful game developers in the world, having created the likes of Fortnite - will we maybe see NFTs and digitally owned assets in these games in the future?

Technical Analysis

Technical analysis is a method used by traders to determine whether they should trade and how to go about it. Through the use of technical analysis (TA), traders try to estimate and predict the price of an asset in the future, find an ‘entry’ (the right moment to enter a trade) and extrapolate its course of development.

TA isn’t something that can be taught overnight since it’s mostly a matter of learning by doing, and most likely making some mistakes and gaining experience in the process.

Before delving further, it is absolutely necessary to set the expectations of what TA can or cannot offer when applied to assets:

• TA can be used to identify entry and exit points (prices at which you buy and sell) for any type of investment. TA is a tool used in trading to make educated guesses to increase the odds of being correct, but can't guarantee the outcome, nothing can.

• There is always a risk associated with a trade. TA is an important guidance tool to help have a strategy in place to cut losses and to know where to do it. TA will set the invalidation of your educated guess and that way you can manage the risk and operate with the right size.

• TA works in any kind of asset that has a market and where the data can be displayed in a chart (forex, stocks, cryptocurrencies, metals, bonds,.. In fact, TA can be used for short-term trading and long-term investment alike. When used for long-term investment it’s advised to combine it with Fundamental Analysis (FA).

Technical analysis is actually a technique based on the fundamentals of mass psychology; many patterns are linked to human behaviour, and the “battle” between buyers and sellers, bears and bulls. Patterns and candlesticks encyclopaedias are usually all about this topic.

TA, just like any other analytical framework, works based on a few assumptions:

First, the markets discount everything. That means all the information that is available out there is already reflected in the latest price of the asset (priced in). TA considers only the historical price data of an asset and what that data can tell us about its future price movement.

Second, the price of an asset over time is likely to follow a trend over time. That is, if the prices of an asset over a period of time (longer intervals) are recorded and analysed, a trend or pattern is likely to emerge.

The analytic part of TA involves the use of charts as a foundation, among the different chart types like line, bar, candlestick, Renko, etc, the most widely used are the candlestick charts.

In addition to the chart price, technical analysis usually incorporates additional tools to help in the interpretation. Some of them are indicators such as RSI, MACD, Volume, Moving averages, Fibonacci and a long etc list.

Other commonly used tools in TA are candlesticks and chart patterns that we mentioned previously when referring to “mass psychology” representation, in the end, patterns tend to be a form of interpretation from market structure also known as price action.

Price action marks one of the most powerful tools in TA, support and resistance zones, in a horizontal or diagonal nature.

With all that to start analysing, one has to determine a timeframe to search for indicators, trends, and patterns. A graph of a single day or a week can look different from a graph of that same market in a time frame of a year. Always zoom out to get a good look at the market in several time frames. That way you can try to discern whether the market is in an upward or downward trend in the long term or short term.

In essence that is what Technical Analysis is all about. Sometimes you will see references to TA as “The art of charting”, and some take that to the max expression!! Hope you liked this one, and to see you in the next one!