UPDATE: Market Dump on CPI?!

What's up everyone, welcome to another weekly market update. So today we're going to look at Bitcoin, we're going to look at Ethereum, and then we're going to discuss a couple of altcoins. Maybe there will be an opportunity there for you because truth be told, there is nothing much going on on Bitcoin and Ethereum. And let's dive right into it. So before I proceed with anything, couple of things that you need to understand is that many people, including myself, are expecting the Bitcoin halving in April of 2024 to be rather significant for Bitcoin. But here's the situation. As Omkar, and I'm not gonna try to pronounce his name, but the Bitcoin halving is nice, but kickstarting the bull run is going to require fiat money supply growth. And at the moment, based off of looking at inflation numbers, based off of looking at interest rate numbers, as well as the M2 money supply growth, it's not looking the best. And unless things take a drastic change over a period of the next, say, 3 to 4 months, it is unlikely that We are going to get the same reaction as we did on Bitcoin during the previous 2 to 3 halvings. So one of the key statistics that you need to understand is that the past bull runs post-halving were associated with a 6% or higher M2 money growth supply from all of these banks. So basically, when there's more money in the market, well, that makes it easier for people to invest in the markets. Doesn't take a genius to understand that. Now, as of recently, the M2 money supply growth has indeed turned positive, but still remains below the pivotal 6% mark. Mark. But again, the reason why I share this information with you guys is simply to give you something to keep in mind as we head into Q4 of 2023. And hopefully everything stays on track and we actually do get a bull run next April, with a potential bottom coming between February or March, as I've discussed previously. Now, other things that you need to keep in mind for this week is that we have CPI later on this week and we have PPI on Thursday. Now, CPI is anticipated to go up during August, and this will be the second straight annual inflation rate increase after July's 3.2%. Obviously, this is pretty bearish news, and we will discuss how the price action is going to react to this bit of news here, and I'll give you guys an exact game plan to take advantage of this. But one of the key factors behind the inflation rise is, is indeed energy prices. By the way, this news here is pretty bearish, as you might expect, and let's see if we can find a bearish setup on Bitcoin to take advantage of CPI this week. And right off the get-go, I'm going to preface One thing. So if you look at Bitcoin price action at the moment, this part, right? I want you to look at this part, and I want you to look at this part. Does it seem oddly or eerily similar? If it does look similar to you, that's because this is the exact. I don't really know what is the name of this setup. Some people call it a Batman. Batman is fair enough. But the thing about these types of consolidations after aggressive volatile moves is that this is trapping a lot of volume. Now, one of the reasons why I understood that Bitcoin is going to get rejected off of this line. Remember last week we predicted this pump, and I even gave. Gave you guys the exact top of Bitcoin where I managed to sell off all of my Bitcoin. Sorry, that was two weeks ago actually. But the reason why I understood that it was not going to return back to this area that quickly is because there is a lot of trapped volume around this area. What is trapped volume? Basically, anyone that sort of went long. Let's say you went long somewhere around here and you place your stop loss beneath the you know the bottom of these wicks. If you didn't get stopped out completely, right now you are holding a position. Right now you're holding a long position that is severely underwater and. When we approach this type of thinking of the market, all you simply have to do is think about mass psychology in a way. If you were a buyer, right, let's say you were a buyer of Bitcoin at around this level, let's say you have a rudimentary understanding of liquidity, well, where would you be logically looking to buy? Well, maybe at a break of this support. Oh, you know, you've already swept sell-side liquidity, you've filled in this fair value gap over there, might be a, you know, logical area where you would buy. And if you do buy, well, oh, look at that, there is clear support you know, quote-unquote support over there for you to place your stop loss. And maybe you don't place a stop loss because you're one of those traders that just love losing money. So in that case, trust me, if I'm the one who thought of that, there is a bunch of other retail traders who would have thought of that as well. And that is the basic concept of trap volume, where you have just people going long where they shouldn't be going long, and they didn't run a stop loss. Right now they're holding a position underwater. Same thing here, right? Let's say Traders get impatient. Let's say you didn't know what you were doing and you don't watch my channel, so you don't know what Bitcoin's going to do next. We already established the fact that it is in a bearish trend. Maybe you look to go long, right? Let's say you're trading range just within this mini range here. You go long and you don't run a stop loss. Eventually, when Bitcoin dumps, you are going to be a part of the trapped volume over there, right? That's what I mean by mass psychology. As of the current moment, this setup here is looking exactly similar to the setup here and also the setup here where you get a scam pump and then you're down, which is exactly what I'm expecting during the CPI announcement where basically, uh, you do have trap volume over here. But what's bound to happen is that if you take a look at this fair value gap over here, so basically from this candle low to that candle high there, you have a fair value gap. And at the 50% line, I have drawn, well, a line where I expect Bitcoin to sort of pump into this area before taking a dump And then something like that to continue down lower to the $24K area. Now, it might happen this week, it might happen next week. Key here to understand is that the magnitude of price delivery, it doesn't really matter, right? We, most of the time, we can predict where price is going to go. The hard part is predicting when it's going to happen. And the only thing that you need to understand about the markets is that it simply moves from periods of high volatility to low volatility to high volatility to low volatility. It doesn't matter how long you stay in the volatility. Let's just say that the longer you stay here, Usually the more aggressive the movement. For example, we have been consolidating on Bitcoin for a period of about 60 days where it's just been doing absolutely nothing. Like, I remember like being a trader at these times, it wasn't fun, there was nothing going on, and that actually prompted me to start a Forex account. So same thing here, maybe it might be boring for just another week or a couple more weeks. At the moment we have already spent about close to a month in this consolidation, but by the time we break out of it, don't be surprised if you reach $24K or even $23K in a matter of 1 to 2 days. But anyways, that is the plan for Bitcoin at the moment. I wouldn't necessarily— like, if it does go up here, that is not a cue for you to go long, at least not yet. The cue to go long will probably only show itself maybe 2 to 3— like, it'll take about a period of 2 to 3 weeks in order for that signal to confirm. So this week, at least just for this week, the bias is definitely still towards the downside. So that's what I will prioritize. The second area where you can look to get back into, although I highly doubt that will come back into this area would be that same white line there at $27,700 to about $27,900, where if you were to return back to this area, this would be a buy-side liquidity sweep in order to create new lows. So that's how it's going to look like, something like that. Uh, highly, highly, highly doubt that it's going to come back that high just because of that same concept there of trapped volume. But if it does return to this white line here at about $26,600, that is a decent area to go short. And if you watch the video next week, we're going to talk about possibly, depending on the situation, whether a bullish scenario has developed. But for now, the target is a TP1 at $24,250 and a second TP at $23,100. Now before I cap off the analysis on Bitcoin, there is also one more thing that you need to understand, and that is the fact that at the moment this setup here, it looks like a classic, you know, inducement, um, 0.705 golden pocket retracement type pump. And I'll give you the general concept of this trade. In fact, if you come from Forex, at least coming from Forex, this is something that I've noticed a lot, is that this setup is very, very incredibly common. And let me see if I can find an example on crypto for you. Okay, at the very least, I don't see it on the daily chart, but basically the concept is you get an initial pump, so something like that, you get a range You sweep the range high, you sweep the range low, and then you return back to a fair value gap before creating new highs. And this here is your inducement where you have relatively equal highs, or in this case, you have relatively equal lows. Now again, this is one of my favorite, personal favorite setups to go for because it's just super high probability. Now this doesn't come around very often, but if it does come around, then, um, it's actually very high probability setup. And also the risk reward is highly in your favor. So what you want to look for, right, First thing is you want to look for a 705 retracement from the initial pump. Don't ask me how I managed to draw that so cleanly. When you've been doing this enough, it's just it's just pretty natural. Anyways, what you want to look for is a fair value gap or an order block around the area of the 705. Usually, it's going to be a fair value gap because this move here tends to be manipulation in order to fill in an imbalance before continuing the bias. Now, we've already established over the course of the last three to four weeks that the overall macro bias is towards the downside. So this might not exactly play out to this extent, but it should still give you an opportunity to go for a small pump, maybe back to the range lows here before going lower again. Uh, either way, it should give you an opportunity because this is a pretty high probability setup. Inducement is basically just creating relatively equal lows or relatively equal highs right above areas of liquidity, or in this case, areas of imbalance. And this is to get traders to think that, oh, we have developed support here and we should buy. And if price were to come back into support, we should buy again and place a stop loss right beneath the support. What that tends to happen is that, you know, induces— right, as the term implies, it induces a lot of dumb money into getting into the markets at around this area where you will take out the liquidity in one sweep, fill in the imbalance, and then immediately pump away afterwards. And the way that you predict the magnitude of this pump is usually that this usually can be done By drawing a fib from the swing low all the way to the swing high, right? And then extending that by a negative— by a factor, or rather a standard deviation of -0.5. Now this is a very textbook setup, and if you look at the chart right now, that is exactly the type of setup that is developing, where you have— if you draw a swing high to swing low, 23,100 is the 705. It just so happens to line up with this daily fair value gap 0.5. So that is one, you know, confluence point check, uh, probably 2 confluence points there check. The 3rd confluence point is the fact that you are getting a lot of relatively equal lows here, and this is just going to induce liquidity in one quick sweep. Boom and boom, right? And in order to determine the magnitude of the sweep, or rather the magnitude of the extension, you can see that it lines up actually very closely with the 0.618 extension, which is right at about $40K. But is that actually going to happen? I highly, I highly doubt it just because of the macro direction that we have established beforehand. But even at the very least, it should still give you an opportunity, for example, to at least come back to this area of trap volume, maybe even slightly higher, doing something like that and coming back lower to target our long-term, you know, bearish target at about $20K. But either way, this is a high probability setup. It should still give you an opportunity to get into Bitcoin. So that is what you need to pay attention to. This week when it comes to Bitcoin, and look for this setup that I mentioned to happen sometime during CPI or even PPI. I don't know exactly if we will return back to $23K this week, but again, remember that when you move from periods of low volatility to high volatility, it can be very aggressive and oftentimes much more aggressive than you would ever think possible, just like with this move right here. And now that we have finished Bitcoin, let's get into Ethereum. Now Ethereum, we are still en route to the same target. In fact, it's a very similar setup to Bitcoin. However, because Because Ethereum and Bitcoin are so closely correlated to each other. Now basically, if Bitcoin dumps, Ethereum is going to dump pretty hard. If Bitcoin goes up, Ethereum is not going to go up as much, but either way, the direction is the same. Trading ETH is exactly like trading Bitcoin right now, but it's sort of like a poor man's Bitcoin where you're not getting much of a pump, but you're definitely getting way more of a dump. So if you were shorting, I would definitely prioritize Ethereum just because of how weak it is against Bitcoin at the moment. Uh, if you were prioritizing longs though, I would avoid Ethereum within a 10-foot pole and I would focus on Bitcoin. So that's the way that you need to approach this. So on Ethereum, exact same setup. In fact, it's even slightly weaker because Bitcoin you have relatively equal lows that are forming here, but on Ethereum you've already swept the liquidity, uh, before the, you know, the before the 0.5 fair value gap entry. But either way, the this should still be a relatively good entry for a long. I Again, I'd recommend focusing on Bitcoin rather than Ethereum because if you do want to short it down to the target, right, let's say on tomorrow's news events you want to short something. Oh, look at that, Ethereum is going to go above. So this fair value gap over here is at $1,673. That is the 0.5 of the fair value gap. Just to illustrate what I'm talking about, that's it right there. In fact, if I use a parallel channel, it should be, uh, it should be more obvious right there. So that's a 0.5. So if you were to short Ethereum tomorrow— I mean, not tomorrow, during CPI— where it goes above this area and then down, I would prioritize Ethereum as a short over Bitcoin. But if you are taking advantage of this entry here, then I would prioritize Bitcoin going long. But either way, the setup is the exact same and you have the prices. And just one last note on Ethereum before I leave you guys off is that Ethereum, for the last 2 dumps, uh, Bitcoin has cleanly filled in the 0.5 of the fair value gap both times, in this time here and also this time here. No, actually Bitcoin hasn't filled in this one yet, but that's just one thing to keep in mind. Uh, is that cause for concern? Not necessarily, just due to the short time frame that we're dealing with. But either way, target is going to be here at $1,520, and of course the long-term target in this case for Ethereum. So just to illustrate how, how different both of these look at the moment is if I were to come to Bitcoin/USDT, uh, head over to the daily. As you can see, Bitcoin is quite a fair distance away from the 0.705, you know, imbalance, whereas on Ethereum, well, you're basically, you know, 5%, right? The magnitude is 2 to 1. That's, that's just proof how much stronger Bitcoin is compared to Ethereum at the moment. Towards the midterm bear target right over here, the midterm bear target, well, Bitcoin right now is about 22% away from that target while Ethereum is at the moment just 11%. So again, still a factor of exactly 2 to 1. Anyways, I mentioned earlier in this video that I would be doing an analysis on multiple altcoins. I will still do that, but given that this video has been about 18 minutes long so far, I'm going to split it up into 2. So look out for another video from me later on this week. And just remember that all of these concepts that I am talking about in this video, including liquidity, how to read the market like the smart money, and how to trade alongside the market makers— I teach all of that inside a free course. That's right, you heard that right. I give all of this information away for absolutely free There's no BS, there's no fluff, it's just pure value. If that's something that sounds interesting to you, make sure you sign up to the waitlist down below. I will be doing another intake soon because just to maintain the quality, we are controlling the quantity just a little bit. And until then, I'll see you in the next video. Bye-bye.