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Hello, good morning everyone. I hope you are doing well. Today, market review. We will talk about BTC first. Then, we will look at Ether and three altcoins that you asked me to analyze. For those who don't know, who are just discovering the channel. Generally, I analyze three altcoins that you put in the comments in previous videos. So today, we will see three. We will see RSR, Render, and Z Cash. Before I start, for those who are not aware, every Sunday, I host what I call the Trader Letter. It's simply an email that you receive once a week, packed with value, whether it's trading, investment, crypto, mindset, psychology. The goal is simply to lift you up. It's 100% free. It takes you between 3 and 5 minutes to read, and we talk about everything. A lot of points. I share advice, lessons, analyses, trades that I've taken. My goal is to bring you maximum value. So there you go, it's free. I invite you to subscribe by clicking on the first link in the description. Then, if it doesn't interest you, well, if you find that the advice I share is not good or whatever, you can unsubscribe. So you take no risk. So there you go, I invite you to click on the first link in the description and you will receive it next Sunday. Of course, if you miss it, you won't be able to reread it because each email is unique.
Now, on BTC, well, we are still in this phase of sideways movement. We have a good weekly close with a wick here that represents 50% of the candle. So that's pretty good. And well, we are still in this range phase, blocked here between two levels. We clearly have a higher chance of reaching a new ATH. Why? Because a range preceded by an upward momentum, preceded by an upward impulse, and we have a higher chance of breaking through and continuing in the direction of the initial trend. This is a little tip for beginners, and by beginner, I mean nothing pejorative, but it's something that perhaps one doesn't know. When you have a range like this, always consider the previous trend. Did we come from an upward trend or a downward trend? If we came from a downward trend, we have a higher probability of breaking the range downwards and continuing. Okay? Because a trend prolongs itself several times and reverses only once. Conversely, if we come from an upward trend, there's a higher chance of breaking upwards. Be careful, I say a higher chance. I'm not saying it's 100% certain. That's why we have risk management. That's why we are careful and don't position ourselves just anywhere. But there you go, that's a fact.
Now, there's a little narrative that I've been hearing lately, since we had that crash, it's "we've liquidated everyone. So, it's sure to go up and go to the moon because the train is empty." I can't understand the logic behind that. It's not because we've liquidated people that it's going to the moon. Okay, we've liquidated people on perpetual contracts, especially on altcoins because if I take BTC, we had a drop of, let's say, less than 13% - 12%. So anything with leverage x2, x3, x5, etc., we didn't liquidate them. Anything with leverage x10, x20, etc., they were indeed liquidated. But it's not because on perpetual contracts the train is empty. And we still have a fairly significant open interest, even with a good drop, okay, we still have open positions, that's a fact, other positions are being rebuilt in the meantime, but it's not because we liquidate people that it's going to go up. Why? Because here, we've liquidated people. What makes the price of an asset go up? It's simply demand exceeding supply. Okay? Demand exceeding supply. So we need buyers. We need buyers to pump. Okay? How can you anticipate that there will be buyers just because we've liquidated people? So the theory is: we liquidate people, buyers will come. I don't understand the logic behind it. Especially since we haven't liquidated people on the spot market. Okay. And if tomorrow we reverse this and we have supply exceeding demand, which is possible, what creates supply exceeding demand on perpetual contracts? It will be either short openings, so people shorting, okay? Or closing of long positions, simply because when you close a long position, you are also a seller. On perpetual contracts, there are two ways to be a seller. Either you are shorting, you open a short, or you close a long. Closing a long can be via a take profit, via a stop loss, via a liquidation, but you close your long position. That, okay, creates supply exceeding demand. When we are on the spot market, like on the chart I'm looking at, spot contract, it means you actually own the asset, you're not going through derivative contracts, you can't short. Okay? And there, the only way to have supply exceeding demand is to have long position closures. Whether the long positions are at a loss, at a profit, it doesn't matter, it's a long position closure. Here, during this crash, we surely had longs on spot that were closed, people who didn't, people who put stop losses, that's entirely possible. But we still have longs that are in position because, firstly, there were surely people sleeping, people who weren't in front of their screens, it happened quickly, etc. There are still people who own BTC. If tomorrow we have big whales who own large quantities of BTC and decide to sell, we will have selling pressure and supply exceeding demand. It's not because we had a crash here and liquidated people that these whales might not sell. Okay? That's an important point. Okay? It's like those who have this theory of saying, "Okay, we have a range, we have liquidity grab, okay, it's 100% sure we'll break upwards." No. Yes, there's a higher probability. Why? Because we have a buying reaction after the wick, and that shows us that buyers are present, but it's not because we've liquidated people that it's 100% sure the market is going the other way. Okay? That's an important point, and I'm not afraid to say, "Okay, we've liquidated people, it's 100% sure to the moon." Nothing is 100% sure. Okay? And especially, it's mainly spot that drives the market, even if perpetual contracts have an impact. Here's the proof that we have this kind of liquidation, that's a fact. Okay? It's mainly perpetual contracts that drive the market. But globally, it's spot that drives the market in my opinion. And here, have we liquidated people on spot? No, because it's not possible. We still have large players and a lot of people who own BTC. If everyone decides to sell, they can mark a top. So, we'll have to watch carefully. Above all, it's impossible to predict in advance what will happen tomorrow, the day after tomorrow, in 5 minutes, no one can know. Will we see buyers here? Will we see sellers here? Okay? Statistically, the most important thing in trading is always to, statistically, have a strategy, something that works, a concrete plan that works, that gives you stats, that tells you, "Okay, in the long term, you have a strategy that trends upwards, okay? That is simply profitable, and you simply apply the rules of that strategy." And then, when you are confident in your method, when you are confident, when you are simply confident in your strategy, then you can affirm certain things more readily, but to say, "Okay, we have a flash crash like we had, it's going to the moon." No, not necessarily. Well, that's just what came to mind that I wanted to talk about that I've seen lately. So, be wary of that. Beware of many people who can sell you dreams and tell you it's going to the moon. Now, it's a fact. As I say, I'm the first to tell you. I told you at the beginning of the video, this range has a higher chance of breaking upwards because in ranges preceded by upward momentum, there's a higher chance of continuing our trend.
Now, if I go back to the short to medium term, where are we? Well, we've broken the 15-minute tunnel. Okay, we've pulled back, we've leaned on it, okay? And for now, well, it's holding. So, my objective is to reach $117,000. We have a good confluence here. 4-hour tunnel, 1-hour tunnel, this resistance zone. So, for me, that's the next logical objective after having this reaction here. And we'll have to see how the market behaves at this level. It's worth noting that we have new weekly pivot points that have occurred with a significant gap. That's normal given the volatility we've had. That's entirely normal. We have a central pivot point at $114,350, a low pivot point around $102,553, and a high pivot point at $126,800. And I remind you of the different weekly pivot points: we have one at $113,000 and another at $118,000. We can even do a quick overview of the weekly pivot points. Here, we have the main one, we perfectly placed a bottom on it at $80,000. We have what's called resistance 1, because we can configure them. You see, we can put extensions of these pivot points, resistance 2, resistance 3, etc. I often only use S1 R1. It can happen that I use S2 R2, S3 R3, of course. It's already quite rare that we reach them, especially on a yearly basis, but globally, resistance 1 here, we also perfectly placed a top on it at $121,000. We see that historically, yes, these are very interesting levels that act as support, support, support, resistance, always very interesting levels. See? So, this simply allows you to locate your zones, and these are levels calculated based on the previous day's levels. When I say previous day, I mean in the context of yearly pivots, it's based on what happened the previous year; for monthly pivots, it's based on the previous month; for weekly pivots, it's based on the previous week, and so on.
Well, that's it for BTC. If I look from an order book perspective, we've repumped a bit, but globally, we don't have large openings in open interest. We see it clearly. I remind you, open interest is the number of long and short positions opened on derivative contracts, on perpetual contracts. When you open a long, open interest increases. When you open a short, open interest increases. When you take profits, when you get liquidated, when you take a stop loss, when you close a position, no matter what, you close your position, open interest decreases. This allows us to see, okay, is there support for a movement? Are we liquidating people, etc., etc. And funding rates are rather decreasing. Okay, so on that, it's rather good. We see that we've found negative funding again. I've told you before, bottoms are often formed when we have negative funding. We see it at this level. Often, when funding rates are rather low, these are signs of bottoms. Well, for now, nothing alarming. No FOMO on that. No FOMO on longs. What we are doing is rather interesting. And I wanted to show you on the heatmap.
By the way, I was asked a question about the heatmap. I was told, "Yes, you use a heatmap where we see limit orders waiting to be executed. What do you think of liquidation-type heatmaps like this?" I must admit, well, not liquidation. Where is it? I don't use it, so I rarely use it, so I don't know which one it is. I think it's one of those I've seen. This type of map. I was told, "Nico, what do you think of this?" I'm not a fan. I'm telling you, I'm not a fan because, firstly, these are liquidation levels that are, in my opinion, theoretical. Okay? It's purely theoretical. It's often above and below the lows and highs. But it's purely theoretical because how can we know where people will get liquidated? Okay? This is not public data. It's worth noting that a liquidation level, typically, you enter a position now at $114,000, you use x20 leverage, it requires a 5% variation to liquidate you. Poof, you're liquidated. So, globally, on the liquidation map, we should have a line here with possible liquidation. Now, if it's just you, it won't be very visible because you probably have a small position size, but when there are many people, that's it. So, I've never researched how it's calculated. Where is it? Where is it? Where is it? It's here. I've never researched how it's calculated. I think there must be a system where they take the volume and the increasing open interest. So, that allows us to know where there are many open positions, they do calculations with average leverage and they manage to find approximately where the liquidation thresholds are. Not 100% reliable. That's a fact, and I can't afford to trade, to use tools. Okay, even if these are tools I used before, it's true, I might rarely look at them, but not 100% reliable. Compared to this type of tool, this type of tool is 100% reliable. Why? Because we take the order book here. The order book is directly the pending orders to be executed. Sell limits, buy limits, but we have the representation of the order book here for Binance spot and here for Coinbase spot on BTC. And this simply allows me to see where there is interest. Now, be careful, it's not because we have a lot of yellow lines here, which shows us that there are a lot of BTC ready to be sold, that it's 100% sure we'll go there or that it's 100% sure these orders will be triggered. That, we are on spot. Okay, so these are sell limits waiting to be executed, people who wish to sell their BTC at this level, but we can simply have cancellations. We see it clearly here, there was a wall of BTC ready to be sold, and the guy withdrew it all. See, the guy withdrew it all. So, it's still reliable. Okay, it's the representation of the order book. However, don't think, it's 100% sure if we go to $120,000 because there are 39 BTC at $121,000 ready to be sold, that it's 100% sure that this level will act as resistance. After that, you have to see how we react. Are the orders still present? And what I look at is, okay, is there support? You see, since this large liquidation wick, we've had a lot of demand created below. We see it clearly here. There's a lot of demand, and especially at this level, we had a lot of supply. Okay. There were a lot of sales ready. We went to get all this supply, all this selling zone, and we see that we reacted well. Okay? And again, these are always levels that simply allow you to identify whether we are in a phase with a lot of sellers, a lot of buyers, and especially when we then execute these levels, how the market behaves. See here, there was a wall of selling. We were confronted with it, and we had a selling reaction.
So, after that, it's not a miracle indicator, okay? It's, for those who are wondering, TradingLite, the site. It's not a miracle indicator. There are no miracle indicators, but it should be combined with an analysis and observing how the market reacts, how the market behaves. And I like to combine Binance and Coinbase because that's where there's the most volume. We can even take Bybit, we can take others, but for me, this is the most interesting. I wanted to share this with you. I know some of you know I've been using this for a while, but there are quite a few new people who have arrived. Here, we are in pure order flow for some people who are starting. Well, it remains a rather complex part, order flow. Okay, I advise you to start with technical analysis for those who are beginners. It's already easier to understand, and then, of course, if you want to experiment, you can go to this type of tool.
I'm switching directly to Ether, which bounced back very well yesterday. Very good daily close, +11%. Very interesting weekly close. We see that we are maintaining this support level that previously acted as resistance and still acts as support. I maintain that Ether has a higher chance of reaching a new ATH. That's not why I'm going to leverage on Ether. For now, I'm just being patient with Ether. It's simple. If I have long or short positions that are triggered in the short term because a setup is activated, I take it. Otherwise, from a spot perspective, the biggest work has been done here, here, and a bit here. For now, with Ether, I'm just taking my profits on the way up. The biggest work on Ether has been done. I entered at the right time, now I'm waiting. We are not in zones where we should position ourselves. For me, professionally speaking, it's impossible to position yourself after such a performance close to an ATH. It's like positioning yourself on BTC when it was at $67,000. Some will tell me, "Yes, but look, you position yourself at $67,000, you get +70%." Okay, maybe. But is the risk-reward worth it? Risk-reward is how much you are willing to lose for the amount you are willing to gain. Okay? If I put here, often most people put their stop loss at zero on spot. For your BTC, your long-term spot stop loss is at zero. Okay? Here, that gives me 0.6 for 1. Am I willing to accept this potential drawdown in case of a retracement for this gain? Not at all. Okay? And if I take the example of Ether, if I enter at this level and I have a stop loss at $0 to have a reward that becomes interesting, meaning generally 2 for 1, that's the minimum, I have to go to $12,000. For 1 for 1, I have to go to $8,000. I'm not interested in a professional entry around $1,500, $1,700 as I had. You see, 2 for 1, 3 for 1 is already much more interesting. Okay? So, as I said, I'm taking my profits on the way up on Ether, and I have an invalidation if on weekly we start closing below $3,800.
Ether is also interesting. We are bouncing in the 15-minute tunnel, rejecting in the 1-hour tunnel. We are in a similar scenario to BTC in this compression zone. We saw yesterday that there was an interesting level to watch on Ether. Why? Because we had the weekly pivot point from last week, the monthly pivot point, the 1-hour tunnel. For now, we are rejecting above it. At the level of the weekly pivot points created, we have one at $3,400, a central one at $4,100, and resistance 1 at $4,800. And at the level of the monthly pivot points, I remind you, we placed a bottom right on it at $3,720. We have another at $4,246, and another, we placed a top at $4,664. For those who want the weekly pivot points and their rally, here they are. Here, they are. If they want to load. We have one here at $4,269, another at $3,200, and one at $2,250. On January 1st, we will look together at the new yearly pivot points that are created. Again, these are interesting levels. We see the central pivot point here as well. Well, after all, these are always zones. See them as zones and not as precise levels. Some will say, "Oh no, yes, it's an intervention zone." Okay, it's not to the dollar. If the yearly pivot point is noted at $3,400, if we go to $3,401, it's not that we've broken it. No, that's not how trading works. But there you go, I remain bullish on my end for Ether, and in the short term, I would like to see a recovery of the 1-hour tunnel. In short, to get back above all of this level. Then, re-entering the $4,250 would be good. We get back above the 1-hour, above the monthly pivot point, above the 4-hour. Well, we'll have a high chance of pushing towards the ATH.
Now, for the altcoins you asked me to analyze, I have RSR. RSR. Well, like most altcoins, we expect a pretty low wick for all of them. Okay, that's entirely logical. Given the volatility, we've retraced quite a bit, -70%. Now, if we look at the close, well, the weekly close is pretty good, and we're returning to a major support level. Anyway, RSR has been oscillating between two boundaries for almost 2 years. An upper boundary here around 1 cent of a dollar, a lower boundary around $0.005, approximately. Well, globally, it's ping-ponging between two boundaries, an amplitude of x2, about 100% between these two levels. And there you go. The lower boundary, a zone where we look for longs. The upper boundary, a zone where we look for shorts. This is a level that must hold, okay? If we start settling below this level, we'll have a high chance of reaching a bit lower. $0.003 will be the next approximate support level. And if we break upwards, we could see retracements. I'll take the highest point, the lowest point. I'll keep this wick with the wick we had here. I prefer it anyway. We'll assume it's an anomaly. I'll position myself like this with my Fibonacci. We could retrace to the 0.618 at this level. Well, there you go. And now, where we are, it would be good to have a small buying reaction, get back above the 1-hour and 4-hour moving averages, and why not propose this kind of structure, a small W structure to go back to the upper boundary.
The altcoins I had next, I had Render. Render, where are we? I don't think it's been bullish lately. Yes. Exactly, we had a big wick on Render. Wow! Well, that's on all altcoins, but it's still impressive to see what happened. Well, Render, the major level is $5, that hasn't changed, I've been talking about it for a long time. We can't get back above this level. We have an Elliott wave tunnel here that still acts as resistance, as you can see. So, we are not in a good context here to position ourselves. What's missing is a buying reaction. There are two ways. Either you enter now on Render because you say, "Okay, I'm on a bad range, I'm at the lower boundary." Well, here I'm in a good zone. And globally, you say, I'll put a stop loss below this low, this close. So, globally, there you go, we're sideways, we have a buying reaction, a low wick. If we reject here and do this, it means we have acceptance below the range. To go much lower, it's better to get out. Okay? That's the first way to enter. Well, that's how I proceed. Everyone proceeds in their own way. That's how I proceed. Either we look for longs where we are, or we simply wait for a weekly close above this level, break above the Elliott wave tunnel, validate these W patterns, and in that case, we could be at a bottom, and then we could retrace and revisit and go back to much higher levels, like for example, the 0.18 Fibonacci at $8.3. There aren't 40,000 setups on Render. Well, that's how I would operate. And if we lose this level here, we see from a price action perspective, it's a major level. The next zone then is globally around here, approximately. There you go, that's the next level, simply step by step. For now, no buying reaction. Okay, we are still at a support level, I won't be looking for shorts. Good zone for a good reward, but then this long scenario here, you have a better reward. However, you take much more risk than waiting for a buying signal.
And the last crypto, Zcash, ZC rather. Crypto. Well, it pumped a lot. I saw it not too long ago. We pumped a lot even. We did x6. This is not an entry to position yourself. I remind you, if you want to position yourself, it's when we have W structures, when we have this kind of pattern, it can be interesting. Here we have an Elliott wave tunnel that still acts as resistance. We break it. Well, when we start to have signals that show us that demand is exceeding supply with these W structures, these larger structures. That's when you should position yourself, not when we start to have such a significant pump. This is much too high in my opinion to position yourself. After all, will we reach the 2017 ATH at $900? Unlikely. Now, you never know. You never know. In any case, it's not a good zone to position yourself. A professional investor does not want to position themselves on a vertical chart. After such a big pump, we are at resistance levels, we are at profit-taking levels. Those who own Zcash, okay, this is a good zone to take profit. If I put moving averages here, however, it can be interesting for trend continuation. You see, the 15-minute acts as support, we lose it. Then, it's the 1-hour that acts as support, we regain it, it acts as support again. If we lose it like here, well, the objective is the 1-hour. If we lose the 1-hour, the objective is the 4-hour. These are very interesting altcoins for trend continuation in the direction of the flow, but for the long term, it's much too late, and we are even at profit-taking levels.
I'll leave you with this. I wish you a very good evening. Don't hesitate by clicking on the first link in the description to join the Trader Letter. I'll see you tomorrow for another video.