Weekly Market Update – 11-28-2022


BTC Overview (Long-term and Short-term TA)
Short-term BTC Practical Example Trade for this Week (11/21~11/27)
US100 Overview


BTC Overview

Until the FTX situation calms down to some extent, one should refrain from taking aggressive positions. I closed the week with almost no positions. However, I did take a position in one spot where I saw a typical chart pattern, which I will show you as a practical example.

Chart-wise, volatility is decreasing and we are at the halfway point in the price range, so I am not in a rush right now and think it is best to trade when the chart is in a better shape.

The difficulty in the current market is that it is impossible to make decisions based on BTC alone. It is important to make a comprehensive judgment by observing each factor in a complex manner.

Since monetary easing has temporarily ended, funds have been withdrawn from the market, and the U.S. dollar is strong, there is no need to be in a hurry to build buying positions over a long-time horizon. This is a phase to protect funds, not an offensive phase. (repost)


↓ BTCUSD 8-hour candlestick chart

The recent FTX bankruptcy and credit concerns caused $BTC to break below its daily range, and although it returned to the lower end of the range at $18,000, it was sold back and folded. Since then, it has fallen back to higher highs and volatility has been shrinking.

As stated last week, a “do nothing (no position)” approach was correct as we are at the halfway point in this current state. I think it is better to wait until it looks like it is about to form a clear range or make a double bottom.


↓ BTCUSD monthly candlestick chart

The November monthly leg is about to close with a negative candle.


In my last article, I wrote: “if you want to target long positions, it’s not too late to do so after this month’s monthly candle is finalized and you have support. If we test the white support box just below ($13,000-$14,000) within this month or over the next month, that’s where I’d like to target it a bit.” As I said, this is the basic policy I would like to follow, and it would not be a bad idea to take a short-term long position at or just below the monthly lows in November.

Short-term BTC Practical Example Trade for this Week (11/21~11/27)

As mentioned at the beginning of this report, the only long position I took this week, saying that I should refrain from taking a position because the current position is halfway up, is the circled wick on November 22, as shown above. Interpretation of this wick is important as it is a pattern that appears frequently in trading, so please take this opportunity to examine it carefully. Since this chart is a 15-minute chart, let’s look at the candlesticks a little higher up.

Then, we can see that the wicks of the long point circled by zeros in the previous section are “a slight break below the recent lows.


In many cases, this “slight break below the recent lows” will result in a reversal. This is because,

(1) A break below the low will bring in a new long-shot short position.

(2) A break below the low will cause long positions that had placed stop-losses at the recent low to cut their losses.

The reason for this is because,

(1) This is similar to the reason I have said many times before, “in a range market, you should never take a long-shot short at the lower end of the range.” This is the reason why it usually doesn’t work.

(2) The other way to put it is if “the enemy of a long position is a long position.” When a price move reverses from a decline to a short rally, the reversal occurs after the long position losses are cut, and vice versa. This is what I mean.

This is how I interpreted the wicks in this case. This time it was the short-term leg, but this can be applied to other time frames as well, so please keep this in mind.


Back to the short-term candles again.

The interpretation of the wicks is the same as above, and although I took a short-term long position at the wicks, in fact, I could have taken a position at the double bottom on the right side of the wicks (yellow oval) instead. In other words, in this case, it would be better to assume a short-term double bottom and place a stop loss at the tip of the wicks on the left side.


As always, it is important to interpret the candlesticks of each time period in a comprehensive manner.


US100 Overview 

↓ US100 monthly candlestick chart

The US 100 has been in a range-bound market this week. Setups will continue as they are and remain to be seen. The range market is likely to continue in this price area for a while. The image of the so-called “attack and defense against the monthly 200 MA” is unfolding.


This has little to do with the movement of BTC this week, but in any case, if the US100 does not rebound, BTC is unlikely to rebound either, so as I always write, it is necessary to watch BTC as well. Another way of putting it is when taking a position in BTC, you also need to consider the movement of this index.