April 27: Not Out of the Woods Yet

Crypto was quite resilient over the weekend with BTC holding onto its gain and even attempting to break above $7,800 with ETH in similar bullish fashion flirting the $200 mark. Even though twitter-sphere has increasingly been more bullish in the last few days, the recent price rally has been driven by short liquidation. You would notice this as open interest (i.e. outstanding positions) have collapsed from 24 April and hasn't recovered since. Further, with this uptick, miners may even liquidate some of their BTC ahead of halving.

How do we trade? Stick to the same plan as last Friday, buy BTC around $6,800 to $7,200 region and stay on the sidelines, as this is a massive week for traditional markets (see calendar below). White House Economic Adviser Kevin Hassett told reporters over the weekend that he thinks the next couple of months are going to look terrible with the unemployment rate hitting 16% or higher when April job reports is released. "You're going to see numbers as bad as anything we've ever seen before."

Second, not sure about the Western world so quickly re-opening is a great idea. For example, Wuhan waited for three consecutive weeks of nearly zero infection before re-opening. Dr Gottlieb also thinks the U.S. isn't out of the woods yet as the country is still recording more than 30k infections a day. This is why I think prolonged lockdown is going to hurt EPS growth, and puts a big question mark around fresh capital channeling into BTC. Goodluck and have a good week ahead.


We are at zone A right now, if BTC cant break above 7,800-7,900 region, we are likely to see it drift towards zone B....