Riot Research #1
Welcome to the new research section on the Tradingriot website.
Ever since I started the blog I wanted to dedicate a portion of the website to a research section which will cover markets that I am watching from both legacy and crypto space, insights into trades that I took and my reasoning behind them and also quick educational bits that shed more light and examples on techniques that I use.
It is safe to say that I have postponed this for quite a long time due to being busy with my personal trading and other projects I am working on, but with the 2024 “New Year, new me” cliche I finally decided to give this a go.
Before we get into the markets, there are some things I want to go through.
First of all, the frequency of research posts will be based on how busy I am and the last thing I want to do is over-promise on something I can’t deliver, but I will do my best to publish a new issue at least once a week, usually at the start of the new trading week.
Please remember that nothing I say here is intended as financial advice, also markets always move and biases can change very quickly, on top of that I am often wrong, always use your discretion and practice proper risk management rather than copy trading someone blindly.
For all the markets and ideas I will share here, I will only be sticking to higher timeframes as any lower timeframe chart can get out-dated very quickly.
These posts, same as other educational content on my blog, are always going to be 100% free and I do not plan to gatekeep some “premium section” behind the paywall or anything like that.
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Table of Contents
Bitcoin has been range-bound for the last couple of weeks after the ETF selloff, we are currently trading right in the middle of the high-volume node at the point of control.
As these are levels with most traded volumes where everyone tries to position for the “next big move” it makes these levels not so great to trade as you have a higher likelihood of getting chopped out before the real move happens.
We have started a new week with little rally which is already weakening as I write this post, one this that has been a very good indicator of strength and weakness in Bitcoin is looking at how spot order books are skewed as they heavily influence the large moves.
Two major exchanges that are worth your attention are Binance and Coinbase as they usually have the most volume, I also look at Bitfinex and Kraken since they are used by big players and have often clean signals of buying and selling.
As you can see in the image below, on both extremes of the range Binance and Coinbase order books were heavily skewed on ask/bid side very accurately before the moves happened.
The orderbook suite indicator which shows how the books are skewed can be found on Tradinglite.
To keep my analysis sweet and simple, this week, I am looking to interact on Bitcoin above 44,000 and below 41,000.
ETH has been getting a lot of hate in the last few months as it underperformed not only Bitcoin but also several altcoins.
Starting with ETHBTC on the weekly chart we can see that it is currently testing the origin of the move after a big impulse move from early January.
In my opinion, this is a pivotal area to hold on ETHBTC for ETH to outperform Bitcoin in the upcoming weeks.
There are some ETH ETF talks already hitting which could be the next narrative for ETH with also an ETH Dencun update coming in the next few weeks.
Looking at the ETH chart itself, it does not scream a strength, we tested demand that led to the large impulse at the start of the year but lacking to find buyers again.
The only interesting pivot I see for this week where I would be interested in trading is the lower timeframe triple bottom at around 2160.
Of course, ETHBTC strength could be a good indicator for possible alt rally, especially in ETH beta, so if you see ETH outperforming make sure to look into coins such as OP, ARB or LDO.
S&P500 and Dollar Index
While crypto struggles in the new year, stocks have been on a whole different level in terms of the strength they showed.
S&P500 is currently in price discovery above prior ATH and honestly, I have no interest in trying to play a hero by catching the top, what I find very interesting on a weekly timeframe is the origin of the move that led to the new ATH.
I believe this will be an extremely pivotal level coming forward if it holds we will go much higher but if it breaks it would be safe to assume that we are about to get a deeper correction.
One thing that might be an indication of possible S&P correction is the strong dollar that is rallying post-NFP.
Dollar broke outside of month-long consolidation and is entering low volume area leaving a nice level of demand below, if it gets revisited I would expect continuation higher.
Link – the obvious strength
One of the altcoins that has been ignoring the rest of the market is Link which broke outside of the consolidation and is holding nicely.
If we revisit $17, I would be looking to position for longs.
Blur – Possible narrative trade
As discussed on the Musical Chairs podcast, Blur has a potential narrative with the upcoming launch of Blast which is created by the same founder therefore it is a good proxy to Blast which does not have a token at the moment.
I would look for a long opportunity under 0.54 which is higher frame support and a high volume node.
ETC – Unusual large buyer
One thing that might be seen as a possible ETH strength and good beta play is Ethereum classic – ETC.
Over the last few days, there has been a strong bid in the Binance spot market getting filled and holding prices up.
If we start to move higher, I will be watching how this buyer behaves and it can bring a good opportunity to ride along with him.
Thank you for taking you time to read the first issue of research, I hope you found some value in it.
Crypto markets seem a lot at the mercy of Bitcoin at the moment and I believe if BTC goes for deeper correction we will see lower prices across the board, therefore I am staying patient rather than jumping in and out of many trades at the moment.
If you want to learn how I execute the positions and also discuss the trades inside the private discord, make sure to pick up Tradingriot Bootcamp.