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Week Ahead

Week Ahead 13th – 19th February 2023

Welcome to the Week ahead.

Before we get into the plan for the next week, if you want to receive every Week ahead as it is written down during the weekend, make sure to either subscribe to the substack or pick up the Tradingriot Bootcamp, which will give you not only access to these market updates but also over 10 hours of video content and private discord.

If you want to support the content, you can also make an account on Bybit that offers trading cryptocurrency derivatives without KYC.

 

Calendar

When it comes to the news this week, the main focus should be on inflation numbers on Tuesday which will set the direction of the market for the remainder of the week.

Besides that, it is worth paying attention to PPI on Thursday as a less significant volatility spike event.

Bitcoin

As expected from last week, we had rotation lower on both BTC and ETH.
I personally participated in ETH short as the location was better compared to BTC which was hovering around minor composite Points of control.
In my opinion, Bitcoin is now at a “make or break” level for trend continuation as it is sitting at the edge of high volume node, General S/R level, yearly VWAP (blue), and 200-day EMA (white).
From the lower timeframe order flow perspective, the move to the downside was fairly shorted which we can see with increasing open interest and decreasing predicted funding, but the low that we put towards the Friday close did not show any significant liquidations or shorts getting absorbed at the lows.
The small rally that we had from the low was mostly made on covering, therefore I would expect the Friday low (weekly low) to get revisited before any significant reversal.

This brings fairly clear trade ideas coming into the next week.

I would be happy to take longs if we trade under the prior week’s low and reclaim the HVN edge at approx $21655, if reclaimed the first long target comes at $22989 being the minor composite POC and general cluster area before the selloff.

If Bitcoin fails to do that and we will continue with the selloff, my first target would be the compression at $20406.

Main pivots for the week:

HVN edge/Yearl VWAP/200DEMA/General S/R @ $21655 – make or break level for the trend to continue

Minor cPOC / Cluster area @ $22989 – First level of the long target, if the market shows strength I would say this gets traded through possibly toward the high of the week considering how big of a level it comes from.

S/R and minor cPOC @ $20400/20000 – First target for shorts, note that the whole of January rally was very thin/one-sided, if the market starts to break down further the move can be very quick and violent.

 

Ethereum

ETH turned out to be a great short from last week although it took two attempts for me to get it.
I entered the first position on Friday based on the exact reasoning I covered in the previous week ahead as a failure to break outside of HVN therefore the market is more rotational and moves back towards POC and another side of HVN is expected.
I have taken a little bit of heat on the position and eventually got trailed out for slight profit during the Powell speech on my trailing stop loss.
As you can see on the chart above market only managed to trade back into HVN edge at $1679 and started to struggle again.
This was a nice initial signal of possible continuation lower as the only long scenario for me was a strong reclaim above the HVN.
By looking at the order flow you can see the large number of longs coming in yet the market struggles to continue higher, because of that I took another stab on the short which played out very well and I closed the trade for approximately 6R near the bottom of HVN.
Another minor factor of confluence and the reason why I focused on ETH instead of BTC was ETHBTC coming to resistance.

ETH (same as BTC) sits at yearly VWAP and 200DEMA but is at the bottom of the High volume node and the price action level is also weaker as we are testing only prior support compared to BTC which is testing a flip of S/R.

Potential upside is also largely capped by big composite POC at 1580.

Based on this information my plan for next week would be to focus on BTC longs if the market shows strength and focus on ETH shorts if the market shows weakness as I think ETHBTC has also some room for the downside.

 

Main pivots for the week:

HVN bottom / 200DEMA / yVWAP / Support @ $1500 – key level to hold for continuation to the upside.

Composite POC @ $1580 – Area of large executed volumes, markets are likely to become slow/rangebound at the POC. The target for possible long.

HVN top / S/R @ $1358 – the target for shorts if we manage to get a breakdown. Due to the thin upside move in January, we have a decent void to fill.

ES

ES had a rather slow and choppy week compared to crypto with only a significant move on Thursday that took us back close to the HVN edge mentioned last week with a small bounce on Friday from minor POC which was also daily nVPOC and cluster area.

Coming to the next week, my main focus will be on crypto as volatility is higher at the moment, but I would be happy to take longs above 4124 to take ou the poor structure above, or watch the reaction under 4043 for a possible short or long (similar to BTC – running prior week low with absorption) trade.

Main pivots for the week:

HVN edge / S/R @ 4124 – note poo structure above, if we reclaim the level it can bring the solid long opportunity towards the highs.

minor cPOC / S/R @ 4216 – first target for longs

HVN edge @ 4043 – key level for me to sustain the trend we had since the beginning of the year.

 

That’s it for the week. I wish you happy trading.

32

chaos

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