Elon, PLEASE stop!
BTC has been on a roller coast ride for over 24 hours. Elon Musk's one-word tweet on Sunday night resulted in a swift 15% dump as FOMO plagued the markets.
Shortly after, Elon tweeted again, writing, "To clarify speculation, Tesla has not sold any Bitcoin." The price then shot back up to around the $45,000 region. Elon's tweets have been a regular market mover for the past couple of months, and the billionaire seems to find pleasure in manipulating low market cap assets in an unregulated space. On Wednesday last week, he also tweeted Tesla would no longer accept bitcoin as payment, reversing a policy decision only taken in March, which also resulted in a 10% sell-off.
Although it is clear that Elon's Twitter fingers have caused recent price action, it's crucial to see the reality behind these happenings. Bitcoin lost upward momentum a long time ago, before Elon's antics. After such a rampant bullish move, corrections are necessary to create liquidity in the markets before continuing on its bullish rally. We noticed one pattern in April and shared it in our community. The undeniable Wyckoff distribution pattern was forming on the 4H chart indicating a further bearish sell-off is inevitable.
Looking at the technicals, if BTCUSD fails to hold support around the current $43,000 level, a further drop to $38,000 seems highly probable, if not a move down to significant support at $33,000. Looking for technicals that support a bullish move from these levels seems bleak. One indicator that is worth mentioning is we have held and closed above the weekly 21EMA. This is usually a pretty good indication that bullish momentum could continue, but the bearish pressure on the daily chart seems to be outweighing this possibility. A bearish scenario and a pullback to $33,000 would align with the weekly 50EMA, also known to act as solid dynamic support or resistance.
Opportunity of the week - XRP
XRP has been one of the rare altcoins that are still yet to break its previous 2017 bull run high. In mid-December 2020, the SEC targetted Ripple. It announced they are opening a lawsuit against the company, claiming XRP is closer to an unlicensed security, akin to company shares, rather than a currency. Ripples ownership of XRP has always been controversial. Unlike other cryptocurrencies, the company still owns the majority of XRP, holding the coin in treasury and selling off fixed chunks at allotted times.
This lawsuit led to considerable speculation, and a vast amount of platforms delisted the holding from their sites, meaning investors could continue to hold the asset but could not buy or sell. The lawsuit is ongoing, which has suppressed the price. We had a recent rally up to $1.96 before a sharp 53% correction, meaning the price has failed to reach near the ATH of $3.34.
XRPs technicals are looking to be gearing for a parabolic run to catch up the % gains YTD we have seen in other coins. We also know from previous bull runs that XRP is typically one of the last movers but one of the fastest. Less experienced investors only ever look at a coin vs. the USD (or their currency) to base their analysis. The more experienced also keep their eyes on the coin vs. satoshi value. Let's start by looking at XRPBTC. It is clear to see we recently broke a very significant level of 0.0003. Price gave us a solid bullish daily close above these levels, which is an excellent indication that the fun is soon to begin for XRP bag holders. The price of XRP vs. BTC continues to strengthen which allows us to know it's very likely, providing BTC can find support around current levels, XRPUSD should also benefit from this bullish momentum.
On XRPUSD we are still waiting for a breakout of the daily (and 4H) pattern shown below. The bullish momentum is yet to kick in. If BTC finds support, it'll allow XRP to break out. We will either execute long positions on a 4H breakout and close, or the safer option is to wait for a retest of the pattern before going long. With the uncertainty in BTC, patience will pay off in this situation as we approach the apex of XRP's pattern.
Currencies: CAD pairs are firmly on our main watchlist this week. CAD has had a strong rally over the past months. We are looking for more deceleration and price action development at this point but can see strong bearish pressure coming to CAD soon. The USD is still bottoming out and trying to find support after a 12-month sell-off. I expect we'll see further weakness this week and will look for price to find support at recent lows on the FXCM USDollar index to then be eyeing bullish dollar moves next month.
Tune into TMC Insights today at 1pm PDT with Irek for more.
TMC CLUB - 6 Figure Trader, Logan
A recent success story shared in our community was from one of our OG members, Logan Chalkley (follow him on Instagram to keep up with his journey). At only 24, Logan is well on his way to achieving a lifestyle most never manage to create. Logan joined us when we launched in 2018, starting his trading career with $5,000 and a dream. Fast forward two years, and he's grown his account into the six figures and has gone full-time.
Logan regularly contributes highly valuable posts within our community, and we know, without a doubt, he will continue to smash through his goals. We hope to interview Logan soon, and we will share deeper insights into his journey as we know how beneficial this can be for others.
What's happening this week?
Mon, May 17th @ 1pm PDT
Insights w/ Irek Piekarski
Wed, May 19th @ 1pm PDT
Market Update w/ Irek Piekarski
Thur, May 20th @ 9am PDT
Coaching Call w/ Jonny Godfrey
*TMC Diamond access required
All the best for the week ahead- see you in the club!
Jonny Godfrey & the TMC Team