Weekly Market Update – 2-27-2023

BTC Overview (Long and Short Term TA and Policy)

This week (2/20-2/26), BTC showed an upward trend at the beginning of the week, but after skimming $25,000, it turned back down. As usual, BTC remains volatile and altcoins are healthy and easy to trade.

BTC Overview

↓ BTCUSD monthly candlestick chart

↓ BTCUSD weekly candlestick chart

This week (2/20-2/26) BTC touched the $25,000 target again. Looking at the horizontal resistance box, the horizontal level suggests $30,000 is the target if the price is to be broken. Therefore, for the time being, the focus should be on whether the current price level of $25,000 can be broken through. Since the weekly price action is positive, we will continue to follow the “buy when it falls” strategy from the beginning of the month.

As I had predicted, February is likely to end up with a small candlestick with a pin bar-like shape. Next week (2/27-3/6), we will have the monthly renewal, so we need to pay attention to the movements before and after the renewal. 2/27 and 2/28 will determine whether the price will be negative or positive, so it is likely the price will move in an bullish or bearish manner.

↓ BTCUSD 1-hour candlestick & divergence chart

Let’s discuss why BTC failed to surpass $25,000 in the recent past, in relation to divergence. Divergence refers to the price difference between BTC futures and the indexed average of BTC cash prices on major exchanges. The so-called Funding Rate (FR) is also determined by the divergence, but usually the futures diverge slightly above the spot price, and when the divergence becomes too large, the upside price becomes sluggish. The chart above is a visualization of this. This is also a good reference to monitor the price movement.

Also, continuing to buy altcoins at a time when BTC is about to make a short-term reversal can be a pretty effective option, as altcoins currently appear healthy.

Continuing from a little while ago, the rise in BTC has improved the overall sentiment in the cryptocurrency market, which makes altcoins easier to trade as they are more likely to rise.

From FR and other indicators, the market is not yet overheated, and it appears to be a good approach to be long altcoins for the time being.

The tips for trading altcoins should be reiterated. However, it is a pattern-association game, and once you get used to it, it is certainly easy to take advantage of. It is also impossible to be in all pumps, so we should trade without overreacting.

(1) Altcoins not listed on Binance for a long time and have not been cleaned up too much

(2) Altcoins in the same genre as altcoins showing a large rise recently

(3) Altcoins with high volume (if the tradeboard is too thin, stop orders are likely to be cut by the wicks)

(4) Position with the daily 200MA

Altcoins are attracted to the 200MA and can show a large rise when their price crosses the 200MA

Remember to trade with these four points in mind.

This week (2/20-2/26), perhaps due to the increased volatility and violent price movements of BTC, there is an image altcoins have not yet fully blossomed (not following the rise of BTC), so we would like to trade aggressively for a rise next week and beyond.