With a new market like crypto we see new things happening all the time, new sets and subsets of blockchain data that have never been seen before or new economical events that Bitcoin and the crypto market in general is unacquainted with. Some examples would be , it would be the first time that BTC plots 8 red weekly candles in a row, but in fact it would also be the first time that BTC would live an ongoing war and such inflation issues.

How we try to make sense of the markets

In traditional markets we tend to look at the financial health of a company and the promises it makes for the future, we then take the technical side and process the whole dataset into our opinion, all by taking a good look at the market structure that surrounds the stock we picked.
In crypto we don’t have a company to analyze, we don’t have EPS or CEO opened positions publicly shared for everyone to see, what we have is raw data and manipulated media. The raw data we have comes from blockchain analysis , amounts spent, transferred, bought or sold, institutionals buying in, long and short ratios, open interest and so much more ….but as you can see it is all biased to the technical side and whenever we get fundamental news for a project we usually don’t know how to interpret it unless it is obvious(eg.: Paypal adopting bitcoin payments) because we are not sure 100% of the quality of the news even if it comes from a reputable source (define reputable now…).

The crypto media is one of the worst kinds that ever existed on earth. With the ease of the digital era that we live in we find articles from overnight self proclaimed “journalists” that spread un-researched news to the masses and eventually hurting the whole environment. And there there are crypto influencers… a breed that exists and thrives due to the lack of interest and dedication of their followers, this media channel has been known for hurting new traders for some time and the information published by them should be treated with attention and skepticism .

Think in terms of probability
Let’s take a look at what seems to govern a lot of things in life , probability and expected value.
The expected value is a simple number that is the result of a certain action and can be positive or negative. Now this is a governing rule in risk management that we talk a lot about. Is this trade going to make me money or am i going to lose, lets assume we are 50% accurate, which is not bad … really i assure you this is a good ratio IF we apply the good risk management. If i have a 50% win rate and every time that i win i get $10 and every time that i lose i lose $5 , in 100 trades i will still have won $1000 and lost $500 so i am $500 in profit.
The difficult part with estimating win rate or hit rate or the bat rate is that they are not precise and they should also be considered in terms of probability.

FOMO and doubt , battles that we encounter at every level as traders

Buy low and sell high, stupid simple right? But what if i miss the entry , what if this trade can be my best one yet …. STOP right now and take a step back. “What ifs” can not be quantified, data can , events can in a lower measure but not doubt or emotional reactions. Doubt hurts us at every level, and it is one of the most important causes of loss in trading.

Trying too hard VS not trying too hard

I need to get profits, i need to get the next trade, if i don’t get the next one i’m f****d , these are all psychological foundations that you lay for yourself that will only drive to unstable trading results and also means trying too hard , worst of all …in the wrong direction. You should be instead focusing in researching and understanding what you are getting into . For example , have you even read the 9 page BTC whitepaper, have you dived in your staking system up to the technicals and the previous founders experience? If you did , that’s awesome as i assure you , accredited investors do that type of research on stocks and crypto before investing and even then they still get it wrong.

Where is bitcoin heading?

The new week will provide more insight on where the price might take us. We have indeed never seen an 8 red weekly candle until now, but if it didn’t already happen it doesn’t mean that it can’t . the longs have surpassed the shorts and the funding rates are favoring green candles but there is much distress in the market, panic and of course our “friend” the doubt. The monthly technicals show us that we can indeed head lower to levels that are depicted in this chart.

The thing is that if we get to sub $20k levels we will be triggering a CASCADE of liquidations that will eventually push us back to $10-$13k levels . But we are not there yet and for now we are just on the low side of a symmetrical range that causes liquidations of it’s own, this is where smaller hamsters or day traders get picked off.

Final word

Where ever the market goes you should be neutral in response. Lately we have been focusing on sniper shorts and a few uncorrelated BTC pairs, if you need guidance and are still lost give us a shout on our telegram or discord channels and we will be happy to help.