Hey everyone, welcome back to another issue of the indicator. This week I'm connecting the dots between three charts that are all saying the same thing. If you only follow one of my posts, this is the issue that ties them all together.

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Bitcoin

Three posts. One thesis. Let me walk you through it.

The Halving Clock

We are now 720+ days past the April 2024 halving. Historically, Bitcoin has never peaked beyond 550 days post-halving. Every cycle. No exceptions. We are well past that window and the math does not favor new highs from here.

The Weekly MACD

A bullish MACD crossover just fired on Bitcoin's weekly chart. Most people will call this the bottom. Chart history says otherwise. When this crossover fires in deep bearish territory, divergence typically follows. Translation: price goes lower first. The crossover is the setup, not the signal. Wait for confirmation.

The On-Chain Picture

In every bull market, price goes multiple standard deviations above the average buy price. In every bear market, the average buy price trends downward and price comes back to retest it. Then it goes below it. 2014. 2018. 2022. Same pattern every time. We have not retested it yet. The average buy price sits near $52,939.

Bitcoin is sitting at $72,200 right now. That is a long way from $52,939.

Bitcoin Halving Clock

On Chain Data: Average Buy Price: $52,939

Weekly MACD Bullish Crossover In Bearish Territory

THIS WEEK’S VIDEO

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Several other reasons why this local Bitcoin top will continue to turn into “the top”. Some of those reasons are a pending 2-week RSI sell signal, pending MACD bearish crossover on the monthly chart, price being multiple standard deviations away from the 200-week moving average, and-timing-wise-we’ve been in a bull run since January 2023.

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Hey everyone, welcome back to another issue of the indicator! In this issue we’ll take a deeper dive into this question, provide a link to the live stream, & cover new opportunities.

Bitcoin

Let’s start with the weekly chart to identify the overall trend. We had talked about “Buy The Right Dip” all of 2022.

• Longer-term bearish divergence ✅

• Sell Signal on Sharp Shooter Candles 3.1 ✅

• Sell Signal on Sharp Shooter RSI 2.0 ✅

• Candle close below trending dots ✅

• Candle close below upward sloping trend line ✅

• Sneaky lower high followed by a lower low ✅

• MACD bearish crossover ✅

• Targets have been set ✅

Today’s Live Stream:

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You may have missed this chart:

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Several other reasons why this local Bitcoin top will continue to turn into “the top”. Some of those reasons are a pending 2-week RSI sell signal, pending MACD bearish crossover on the monthly chart, price being multiple standard deviations away from the 200-week moving average, and-timing-wise-we’ve been in a bull run since January 2023.

In addition too, the canary in the coal mine $MSTR has been in a bear market for 12 months.

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For instance, yesterday, they had a chart in their newsletter showing that for the last three weeks, crypto’s been seeing net inflows of capital, which should be quite bullish, especially if those inflows continue.

The S&P’s had a great year so far—up 10% from the start of the year and breaking new highs.

Jesse posted this chart showing the $VIX (volatility in the S&P) is bullish. That’s typically not a great sign for the S&P.

Are we seeing a bull trap?

Twitter tweet

What is a Bull Trap?

A bull trap is when price breaks above a key resistance—like an all-time high—and breakout traders buy it, only to have it fall below the key resistance again.

The S&P 500 is forming a potential bull trap here:

1. Price broke above the previous highest close.

2. It put in multiple closes above it.

3. Now, it’s testing to see if it will close back into the previous range and below the trending dots.

If that happens, then all the bulls that bought the breakout are trapped underwater.

It’s also possible the price springs off the previous high, and goes higher.

S&P 500 daily chart showing a bull trap

What’s a bear trap?

A similar thing can happen to bears.

Bitcoin recently gave an example of a bear trap:

1. Price broke below the range low at $61.1K.

2. Bears shorted the breakdown

3. Price regained the $61.1K line

4. Now, any bears that shorted below the range lows are trapped.

Bitcoin bear trap on the daily chart

How do you trade a trap?

Traditionally, the target for a bear trap is the range highs.

A bear trap is the market taking liquidity below the range, which often means the next biggest pool of liquidity is the area above the range.

There are a few different entries on a bear trap:

1. Enter when price re-enters the range with stop at the wick

The first entrypoint is when price breaks back into the previous range. In that case, you might put your stop below the wick of the bear trap.

The downside: price could get rejected at the previous range low and continue lower. This is why we have stops.

2. Enter when price retests the range lows.

Another entry is to wait for a re-test of the range lows for an entry, if it comes.

This would form a higher low.

If you were being aggressive, you could place your stop below the higher low. Or if you wanted a wider margin for error, you could place it below the lowest wick.

The downside: Price may not retest the range lows, or may continue to breakdown.

3. Enter when price breaks downtrend

The third entry is buying the breakout, when price is breaking the downtrend.

In this case, you might place your stop below the higher low.

The downside: price can move through the breakout quickly if you’re not paying attention, as shorts get squeezed. You’re also paying a higher price for more confirmation versus buying the range low.

Buy when price breaks the downtrend

There’s no one right setup. They’re tradeoffs. And you have to find the setups that you’re most comfortable trading.

How the trade would look on the S&P

Seeing how it worked on bitcoin, we can apply similar setups to a short on the S&P if this turns into a bull trap.

Please note: I’m not telling you to take these trades. This is for educational purposes only, so you can start identifying these trades yourself and make your own decisions.

Short Targets

With a bull trap potentially underway, we could identify two targets here, if we get a close into the range.

First, we could target the range lows with a stop above the high.

This would give a 3:1 reward:risk. This means the take profit is three times further from the entry than the stop is. It also means you’d need this setup to work out at least 1 in 4 times for it to be profitable.

Short targeting range lows

The second target might be the golden pocket, which also happens to show a gap on the daily chart.

Filling the gap would have a 2:1 reward:risk ratio, so you’d need this setup to work at least 1 in 3 times for it to be profitable.

Short targeting a gap fill at the golden pocket.

We can see a similar pattern is playing out on the Dow Jones, which broke the all-time high, and then retraced to the golden pocket so far.

Dow Jones bull trap played out to the golden pocket

Like I said, I’m not telling you to go make any of these trades. If anything, it’s better to papertrade them and see how they work out for yourself.

Price may breakdown here, or price may go higher. And you’ll never know for sure when you take a trade.

That’s why we look for high probability setups, and we use stops to get us out of a trade when we’re wrong.

Hope that helped. Happy trading!

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Disclaimer

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In Wednesday’s newsletter, we tried to map out what the ETF launch might look like.

The one thing we knew for sure was that there would be volatility.

And we got it.

From the bottom of the wick to the top, $ETH moved 12% within a single day. Then it closed back around where it had opened the day before.

$ETH ETF decision

$ETH 1 Hour Chart

We can also look at the sequence of events on the 1-hour chart.

Sometimes, reviewing the tape can help us be smarter for next time.

$ETH sequence of events

Here’s what happened:

1. Credible ETF rumor — when the news dropped that ETF filings were being updated on Monday, this is where the biggest pump happened. If you got in within the first hour of the announcement, you’d still be in-the money right now.

2. Fake dump — When the market closed yesterday with no announcement about the ETF, price got pushed way down. Most likely, people were overleveraged long, and so the market makers took out their stops before the announcement to get more cheap coin.

3. ETF approved — There’s a big spike in volume, but not much movement in price. Market makers were ready to sell the coins they bought on the fake dump, so there was more than enough supply for the announcement.

4. Sell-off — Anyone who bought $ETH right at the announcement were paying a premium for that confirmation, and price has been trailing down as volume and excitement trailed off.

Takeaways

You can draw your own conclusions from that sequence of events, but here are some of my observations:

1. Get in the trade early.
   Most of the value from the ETF rumor accrued to people already in long positions when the rumor happened.

2. Expect volatility.
   On days with expected news, there’s typically a lot of volatility, unrelated to the outcome. Stops might get run on new positions.

3. Pay a premium for confirmation.
   When buying on days with expected good news, we might pay a short-term premium for that confirmation. Price will often sell off after the expected good news.

4. If outcome is as expected, price won’t change.
   If the outcome is what the market expects, then there might not be much movement on the price overall.

What’s next for $ETH

Right now, $ETH is consolidating sideways, as the trending dots on the Sharp Shooter Indicator are catching up.

There are three levels to watch here:

1. $3.7K — this is the previous pivot point that $ETH has been closing above so far.

2. $3.5K — We have a lot of daily candle closes and opens down here. This is almost where the wick reached on the fake dump.

3. $3.2K — If we got a deeper pullback, this is where I’d expect the next support would be.

Most likely $ETH stays above $3.5K, but as you know, the market likes to test confidence with scary dumps before the next move up.

I’d expect that as the ETFs open up (or even in anticipation), and inflows start coming, that $ETH will start trading higher.

Lots of reasons to stay bullish on the high timeframe as we head into the holiday weekend.

Happy Memorial Day to those who celebrate!

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Tomorrow, the $ETH ETF decision will be announced, and more likely than not, it will be an approval.

How will the markets react?

We’ll take a look at the $ETH chart and then look back at how $BTC reacted when the bitcoin ETF was approved.

The $ETH chart

Jesse went over the $ETH chart today on the livestream, and he actually didn’t mention the ETF at all.

He judged it based on the momentum he’s seeing, and he pointed out a few things.

1. $ETH is ultrabullish on the daily

The Sharp Shooter Indicator is showing $ETH in orange—which means it’s ultrabullish on the daily.

The last time that happened, it stayed that way for about a month and ran up 50% before the correction started.

So one possible path is that it just keeps trending upward. The 100% extension would put the next top ~$5.3K.

2. $ETH is getting far from the trending dots.

Jesse also noted that $ETH price has gotten pretty far away from the trending dots on the Sharp Shooter indicator.

When that happens, price sometimes needs to go sideways, waiting for the trending dots to catch up.

3. $ETH has put in a higher high.

Jesse’s last note was that price is putting in a higher high, and so that makes it more likely that the low is in here and that price is more likely to push up higher.

$ETH put in a higher high

Even if the ETF is a sell-the-news event, I’d still expect it to put in a higher low with support around $3.2K at the lowest.

This might be if the ETF is momentarily rejected,

What happened when the Bitcoin ETF was approved?

When the bitcoin ETF was approved, BTC pumped leading up to the approval, and then tumbled 20% over the next 11 days.

Then it went on to rise another 91% over the next 50 days.

Bitcoin daily chart after ETF approval.

My only caution in translating this example to $ETH is that bitcoin had a lot more warning leading up to the ETF approval.

This gave price a lot more time to pump in anticipation.

$ETH, in comparison, has been much more of a surprise to the market.

If there is a deeper retrace and it’s a sell-the-news event, I’d still expect a higher low to get put in, rather than the deeper tumble bitcoin will take.

ETH retrace path

On the livestream, Jesse showed other assets like bitcoin and $LINK that were looking to put in higher lows, and so a short-term pullback on $ETH directly after approval might achieve that.

Bitcoin daily chart

Either way, there should be some volatility on the $ETH chart today with the approval, so be careful with lower timeframe trading!

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On today’s livestream, Jesse covered the usual: bitcoin, alt coins, the indices, bitcoin miners, magnificent 7 and more.

The bitcoin miner’s caught my attention so we’ll go through it today. You can watch the miner’s clip if you click here.

Let’s get into it!

$MARA

Marathon Digital ($MARA) might be leading the way. It’s broken out of the downward trendline and today it hit its second short term target.

You can see that $MARA had three higher lows and higher highs, which is a bullish pattern as it works itself higher.

$MARA daily chart showing higher highs and higher lows

$MIGI

Jesse noted on $MIGI how important it is to take profits along the way with the miners.

At the end of 2023, $MIGI pumped 610% in a 30 day period, and it’s spent the next 130 days consolidating and a -80% move.

To capture a move like that you need a strategy for exit, as well entry because it will move down as quickly as it goes up.

In this case, selling a close below the trending dots on the Sharp Shooter Indicator would’ve been a good strategy.

$MIGI still hasn’t broken out but it’s potentially putting in a higher low.

$MIGI daily chart

$RIOT

Riot’s putting in a potential higher low here, breaking out of the downard trendline and has a pending buy signal.

The 200WMA is ~$16.

Let’s go $RIOT!

$RIOT daily chart looking bullish

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This week, the SEC has a deadline to make a decision on whether the Ethereum ETF will be approved.

The market widely expected that the ETF would be denied.

But in an unexpected turn, the SEC asked $ETH ETF providers to update key filings.

This led an ETF Analyst at Bloomberg to update the probability that an ETH ETF gets approved this week to 75%:

Twitter tweet

At this point, without concrete proof that the ETF will get approved, this is a rumor. It has more likelihood of happening, but it’s not a sure thing.

It could still be that the SEC denies the ETF this week, causing the move to get retraced.

We don’t know what will happen. That’s why we keep aware of the news, but look to the charts to help us decide how to trade.

If the Ethereum ETF gets approved it could be a pretty big turning point for the market and kick off a wider alt run.

Onto the charts…

The $ETH Chart

First let’s look at the Ethereum chart.

We haven’t covered it in this newsletter but Jesse’s been regularly posting about it on Twitter and talking about it on the livestream.

Three days ago, Jesse posted the $ETH chart below:

Twitter tweet

It had four bullish signals marked out:

1. Pending buy signal on the Sharp Shooter Indicator 
   These candles are in green. It’s the fifth buy signal, since the downturn started. So that alone might not be enough to convince you to take a trade.

2. Bullish divergence
   This is the yellow circle Jesse was drawing, showing that price was making lower lows while RSI was making higher highs. This is indicative of a bullish reversal in momentum.

3. Support at a target box.
   The target box in green was an area that Jesse was looking for Ethereum to find support, and it did. Setting this expectation helped Jesse be ready to take a trade when momentum changed.

4. Price broke the inner trendline.
   This is a place where traders could take an aggressive early long because it shows price is changing momentum—but it’s also close to support, which if broken would invalidate the trade idea.

Jesse went a bit further to show the yellow squiggly line, where $ETH might put in a higher low before going higher.

Earlier today, Jesse posted an update to the chart where price was butting up against the outer price trendline.

Twitter tweet

Then boom! The candle blew up on the ETF rumors.

Twitter tweet

Of course, Jesse knew nothing of the ETF news when marking out the trades. But by following price momentum, he could tell where $ETH might turn around.

$ETH / BTC Chart

If the $ETH ETF gets approved—or the market starts expecting with that the ETF will get approved soon—this could mark an important turning point.

One way to see that in the charts is through the $ETHBTC chart.

What this chart shows is how much investors prefer $ETH versus $BTC at any point in time.

If investors prefer $ETH, this chart goes up. If investors prefer $BTC, this chart goes down.

In the case of $ETH / BTC, it’s been going down for quite some time now:

$ETH / $BTC weekly chart shows a potential bullish reversal

But there’s several reason why this might be a key reversal on the $ETH/$BTC chart:

1. A 600+ day downtrend
   That’s almost two years! Two years where investors have been preferring BTC over ETH. Consolidations happen in both price and time, and from a time perspective, a macro reversal could be possible.

2. Bullish divergence on the weekly.
   While price has been making lower lows, RSI has been making higher lows, indicating a shift in momentum. Since we’re looking at the weekly chart here, it means the reversal could also be a trend on the weekly timeframe.

3. Key support at the log .618 fib and Feb 2021 high.
   Hitting a key level like this makes it more likely that a macro low could be in. Reversals often happen at key supports.

Can $ETH / $BTC go lower?

Absolutely.

But the reasons abover are why the low could be in. We’ll be watching to see if it makes a higher high and higher low next.

BTC.D

If the bottom is in for $ETH/$BTC, then it’s quite likely the top wold be in for BTC.D.

BTC.D is the percentage that bitcoin makes up of the total market cap of the crypto market. Right now, it makes up ~55% of the total crypto market cap.

On the BTC.D chart, we can see bearish divergence on the weekly chart, where price is putting in higher highs and RSI is putting in lower highs.

BTC.D almost has hit the key level of log .618 too, but not quite.

It’s certainly too early to call the top of BTC.D, but it’s worth continuing to watch.

Typically, when BTC.D starts dropping after BTC runs up this much, it means we’re getting closer to alt season, where alts run hard.

We’ve already been seeing hints of this with $PEPE leading the way, as Jesse noted on Twitter:

Twitter tweet

Today could be a pivotal day for the crypto market. Could also be nothing 😄 

Happy trading!

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Disclaimer

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Jesse’s traveling, so I’m deviating from our normal recaps to cover an area I’m bullish on:

Presidential memecoins.

If memecoins aren’t your thing, feel free to skip this one.

But, if you’re a bit of a degen, then keep reading—it might be entertaining.

Please note: this is not financial advice. 
These assets are even more volatile than bitcoin or ethereum, so you should only do it if you’re comfortable losing what you put in and have a plan for entry and exit. I have holdings in the assets mentioned from prices that are lower. Please, please, please be careful. In the recent drawdown, $BODEN lost 80% of its value within 35 days, so you have to know what you’re doing or you will lose money.

What Presidential memecoins are

Presidential memecoins are memecoins, like $DOGE or $PEPE, that have been named after the presidential candidates, Trump and Biden.

According to CoinGecko, the top three coins by market cap are $MAGA, $BODEN, and $TREMP.

None of these are endorsed by the official campaigns, and so they’re only valuable because these are the most popular ones related to the election.

Here’s a little more depth on each of them:

1. $MAGA ($380M market cap)
   This memecoin is the largest one for Trump. The developers take a 1% tax on every transaction and part of that is donated to National Veterans Homeless Support and Veterans for Child Rescue.

   

   $MAGA: “Make crypto great again!”

2. $BODEN ($230M market cap)
   This is the largest memecoin for Biden. It’s a parody of Biden that pokes fun at him for being old, sleepy, and even wearing a diaper. There are no taxes related to this one.
   

   Twitter tweet

3. $TREMP ($106M market cap)
   This is a parody of Trump by the same developers as $BODEN. No tax on this one either. It’s the smallest but up and coming.

Twitter tweet

If you’re feeling a little offended or think this is childish, that’s part of the appeal. It makes the media talk about it—people buy it as a way to thumb their nose at politics.

The Presidential Memecoin Thesis

When financial professionals want to make an investment, they put together a “thesis,” which is a fancy way of saying, “Here’s why I think it’s a good idea to invest.”

But it can be a little more than that.

Done well, it lays out each argument with data supporting why you think it’s good idea.

If any one of these arguments turns out to be wrong, then it puts the whole thesis at risk of being invalidated.

So below is my thesis for why I think Presidential memecoins could outperform this cycle, and any one of these tenets could turn out to be wrong:

1. We’re in a crypto bull market that will continue through the presidential elections.

In my opinion, as long as the S&P 500 ($SPX) continues to make higher highs, bitcoin and crypto in general will likely follow.

In the recovery since the 2022 lows, $SPX has generally moved to new highs first, followed by bitcoin, and then the rest of the crypto market.

Comparison of SPX, Bitcoin, and the rest of crypto since 2022 lows

Within just the last few weeks, SPX made another new high, and I believe it will continue to do so through the end of the year.

On the monthly timeframe, RSI for $SPX look quite healthy at 66. Both price and RSI are making higher highs and higher lows. The April pullback was bought up quickly showing good demand for $SPX.

$SPX monthly chart is bullish

As long as this trend continues, crypto will likely follow and continue to benefit.

2. The presidential election will bring attention to presidential memecoins—and money.

We’re already starting to see glimmers of this happening.

For a Trump rally in Michigan on April 2, the team behind $BODEN offered 1,000 $BODEN to anyone who brought a $BODEN sign to the Trump rally.

Three people took them up on it, and Yahoo! Finance wrote a story about it.

Twitter tweet

Then price rose over 300% in the next 7 days.

$BODEN 1D chart

As the election gets closer, the media will only be searching for more stories like this related to the election.

And if crypto is roaring and people are making money, it’ll only bring more attention to this category and push valuations higher.

3. Presidential memecoins have a lot of room to grow.

The two biggest memecoin entrants this cycle are $PEPE, which has about a $4B valuation, and $WIF, which has about a $2.3B valuation.

The three presidential memecoins listed above have a combine valuation of $0.8B.

They’re babies in comparison.

In fact, in the memecoin category of CoinGecko, there are 10 memecoins bigger than $MAGA, 15 bigger than $BODEN, and 27 bigger than $TREMP.

These include ones I hadn’t heard of before, like $CORGIAI and $APU.

If $MAGA got to the size of $WIF, it’d be a 5-6X move, and $BODEN would be a 10X move. At $PEPE, $SHIB, or $DOGE valuations, it would be even more.

If the general crypto market also expands over this time period, then the multiples could be bigger too.

However, presidential memecoins are a very new category, so there’s not much precedent for how big it can get, and we can only speculate. 85% of the value of the memecoin category are dogcoins and pepecoins, and so this is an unproven category.

4. Presidential memecoins have a wide appeal

When you think about who would buy a memecoin like this, it can be anyone who:

1. Wants to express an opinion about the election

2. Thinks it’s funny—and wants to tell their friends about a funny thing they bought

3. Wants to speculate and make money on the election

Because the coins are mainly available on DEX’s and not Coinbase, it does appeal to a more crypto native audience.

The charts

Alright, now that the thesis is out of the way, let’s dive into the charts.

$MAGA

For the last three months, $MAGA has been in a range between ~$4 and $10.

It’s currently toward the top of the range ~$8, and could have some support ~$6.6 if it continues to retrace back to the trending dots on the Sharp Shooter indicator and some of the previous closes.

New daily closes above $9.90, and we’re back into price discovery mode.

$MAGA daily chart

$BODEN

$BODEN has been trading in a range of $0.25 to $0.90 over the last 55 days.

It’s had a bigger retrace of 80%, and is currently bouncing above the trending dots. RSI has broken the downtrend, and price has broken the downtrend on a closing price basis but not based on wicks.

We still haven’t seen a higher low put in yet, and RSI is still below the 50 on RSI. We’re looking for that higher low next.

$BODEN daily chart

$TREMP

$TREMP is in price discovery mode right now making higher closes.

$0.83 can potentially act as support in a pullback, and then fib extensions show higher targets at ~$1.63 and ~$2.95.

$TREMP daily charts

How to trade political memecoins

The same RSI based strategies that Jesse teaches for bitcoin also apply to memecoins.

For instance, $BODEN put in bearish divergence where price made higher closes and RSI made lower closes before it dropped 80%.

If you want to learn more about those strategies check out his site.

$BODEN makes bearish divergence on daily chart

However, these assets are more volatile than bitcoin, which means you have to be decisive in taking profits, or it’ll reverse on you quickly.

My general approach will be to do little trading with these, and instead hold up until a few days before the election. I’d expect election results to be a sell-the-news event.

How to buy presidential memecoins

Unfortunately, you can’t buy them on Coinbase, and it’s doubtful that Coinbase wants to take the political risk of listing them (though I could be surprised).

To buy, you’ll probably need to use a decentralized exchange on Solana.

To do that, you have to:

1. Add the Phantom browser wallet extension on your browser

2. Buy some $SOL on an exchange, like Coinbase

3. Transfer that $SOL to your Phantom wallet

4. Trade the $SOL for $MAGA, $BODEN, or $TREMP

If you haven’t done this before it can be intimidating. But it’s worth learning how to do it. You’d be directly participating in crypto then!

What do you think?

Ok, I laid out my thesis, but what do you think? Am I full of it? (The answer might be yes!)

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Bitcoin had a big move up today, squeezing out shorts.

Here’s what Jesse posted earlier on Twitter:

Twitter tweet

Why it’s bullish

There were several reasons this is bullish:

1. Price made a higher high above $65.5K

2. This confirms the local lower higher at ~$60K, keeping our range low of $61K intact

3. It means price broke above three key levels: 1) 50DMA, 2) downward trendline, 3) trending dots

4. Daily RSI has a long upward sloping line which could support further rises in RSI over a long period of time

Bitcoin daily chart

What we want to see next is for bitcoin to stay above $65K and confirm the 50DMA as support.

And at the very least, if there’s a short-term retest, we want price to close above the trend line and previous daily candle closes ~$63K.

Bitcoin potential retrace

As Jesse says, we’re not out of the woods until we get closes back above $73K. But there’s good reasons to be bullish.

$PEPE leading the way?

For Discord members, Jesse posted the $PEPE chart and said:

“$PEPE already took out the pivot high from March. If Bitcoin were to do the same, then price would be at $74,000.”

If you’re interested in joining the Discord and getting the Sharp Shooter indicators, click here: https://marketsniper.pro/pages/services

Jesse posted $PEPE chart in Discord

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Today, Jesse went through a boatload of charts on the livestream, and there were a few bullish ones!

We’ll round them up today.

Watch the full livestream here:

$LMND

Lemonade broke out of its long-term trendline and is showing a bullish MACD crossover on the Sharp Shooter Indicator ($LMND livestream clip).

Twitter tweet

$TDOC

$TDOC’s down 96% from its all-time high, and it’s been looking for bottom.

On the livestream, Jesse showed that it’s showing some potential to reverse:

• Bullish divergence

• Followed by a reversal candle

• Now price is above the trending dots

• And there’s a MACD crossover

Of course, it can always go lower, but we’ll be looking for that higher low ($TDOC livestream clip)

$TDOC daily chart

$MIGI

Most bitcoin mining stocks are down and still searching for bottom. Jesse highlighted that $MIGI might be putting in a higher low, after dropping 80% over the last four months ($MIGI clip from livestream).

$MIGI daily chart

$SOFI

$SOFI broke out of the down trendline with a buy signal and bullish MACD crossover, after bullish divergence on the daily chart ($SOFI livestream clip).

$SOFI daily chart

Silver

Silver is looking to make another higher weekly candle close this week after its break of the long-term trendline (Silver livestream clip).

Silver 1-week chart

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On today’s livestream, Jesse gave his thoughts on Gamestop ($GME), which more than doubled today over its close on Friday.

Is this a good place to buy?

GameStop more than doubles

Jesse, of course, doesn’t give buy or sell advice, but he said in his system, he wouldn’t buy here. For him, this would be chasing.

Here’s what he means by that.

Jesse wants to buy before a big move like this.

Jesse noted that the last buy signal on the weekly chart was two weeks ago at $16.47—about half the price it is today.

$GME weekly chart

Last week’s close added another confirmation of breakout which was the break of the almost 1,200-day trendline, which would’ve gotten you in at $17.45.

$GME breaks trendline after almost 1,200-day trendline break

If you look at the daily chart, the last buy signals were Apr 26 at $11.85 and May 2 at $12.79.

$GME buy signals on the daily chart

In fact, the May 2nd entry gave the higher probability setup on the daily chart with:

1. Buy signal

2. Higher low

3. Above the green trending dots

4. Trendline break

And it’s been ultra bullish on the daily chart since then, up 138%.

$GME daily chart

Of course, it’s not when price was at $12-$17 that everyone’s talking about GameStop. It’s only when it’s up 100%+ that people are looking to buy.

At $30, FOMO is kicking in—fear of missing out. “What if it goes 500%? 1000%”

But FOMO is the best way to lose money in the market.

Some people might make money buying here. But without a system, then it’ll create bad habits and that will end up giving profits back.

If you’re swing trading, then with Jesse’s system, he’d rather be buying at $12 before the move happens, rather than at $30.

Bitcoin note

Today, bitcoin closed back above the 100DMA and the $61K range low.

We’re still hoping this will be that bullish higher low, and that it’ll stay above the trending dots to push higher.

Bitcoin daily chart

On the livestream, someone asked Jesse about $PEPE, and Jesse noted that $PEPE has made two higher lows.

$PEPE daily chart

Maybe $PEPE is paving the way for bitcoin.

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Today, bitcoin rolled back its gains from yesterday, closing below our key level of the 100DMA and $61K range lows.

Each time we close below the 100DMA, it’s another warning sign that it may be weakening as support and becoming resistance instead. This also invalidated the higher low for now.

We’ll want to see price regain the range and the 100DMA to start getting bullish again.

Price closes below 100DMA and $61K range low.

Jesse went through his thinking about it in the livestream today:

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Today, Bitcoin closed the day above $63K, and that’s bullish.

Let’s talk about why. The chart below is the one to refer back to:

BTC 1D chart with a potential higher low at 100DMA / $61K range low

1. Bitcoin is making a potential higher low

In Tuesday’s newsletter, we commented how several alts were making higher lows, and we were looking for bitcoin to do the same thing.

The bounce at $61K has the potential to be that higher low, since it was a noticeable low on both price and RSI.

Bitcoin has also been correcting for almost 60 days now, which is enough time for a potential low to be in.

2. Bitcoin reconfirmed the $61K as support

$61K is both our range low, and where the 100DMA comes in.

Last week, price tore through both these supports—which was concerning—and then quickly recovered.

Today, price bounced off those supports. What we didn’t want to see was those supports turn into resistance because it put lower targets on the table.

3. The candle’s bullish engulfing.

This close was particularly strong because the candle was bullish engulfing, meaning it close above where the previous days red candle opened.

What we’re watching next

As always, we’re not out of the woods. There’s a few things we’re watching for:

1. Will $61K continue to hold as support?
   If we start closing below the 100DMA and $61K line, we’ll probably start to get more bearish again.
   

2. Can price flip the 50DMA ~$66K from resistance into support?
   The 50DMA still hasn’t been tapped since it was broken in mid-April. It’s the next thing we’d like to see price regain. Price might follow the wicks from Monday and Tuesday up there.

   

   Path for price to flip the 50DMA into support

3. Will the general markets (S&P / NASDAQ) make new all-time highs?
   Bitcoin is still correlated with general markets, so if the S&P and Nasdaq fail to make new highs, it’s likely bitcoin will too
   

   

   S&P 1-Day Chart

Here’s a bullish tweet to leave us with:

Twitter tweet

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In yesterday’s newsletter, we noted that we’re looking to see where bitcoin’s next low will be.

There were three paths:

1. Most Bullish: Holds above the trending dots on the Sharp Shooter indicator

2. Bullish: Put in a higher low in the $59-$61K range

3. Bearish: Put in a lower low in the $50K to $52K range

Since it’s buy-the-dip season, we lean toward the bullish paths. But we’re also not out of the woods yet, until bitcoin starts making new all-time highs.

Three paths for bitcoin on the daily chart

In the livestream today, Jesse covered a number of alts that are potentially making higher lows.

If you missed it, you can always replay here:

The caution, of course, is that alts tend to move together, and so if bitcoin tumbles these will likely tumble too. Nonetheless, these charts show the type of higher lows we’re looking for on bitcoin.

1. $NEAR

Jesse tweeted about the higher low that $NEAR put in, along with a potential target of ~$10, if the head-and-shoulders played out.

Twitter tweet

2. $DOT

$DOT has had a monster retrace from its high and it’s back to the price it was 6 months ago.

Twitter tweet

3. $ALGO

$ALGO has a big wick to follow to the upside on the Coinbase chart too.

Twitter tweet

4. $ATOM

$ATOM is fighting that downward trendline now.

Twitter tweet

5. $FET

$FET has been strong this bull cycle and so it’s not surprising that it’s also made a higher low.

Twitter tweet

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Bitcoin closed the week with a “buy” signal on the Sharp Shooter candles.

This is quite bullish for a number of reasons, we’ll go through today. We’ll try to draw out what it means for the week ahead too!

Buy signal on the daily chart

Here’s why it’s bullish…

1. Bitcoin regained the $61K range

Going into the FOMC meeting on Wednesday, bitcoin broke the $61K range low that it’s been in for the last two months.

With that break, we noted in our wednesday newsletter, “How Low Will Bitcoin Go?”, that bitcoin either needed to regain the range or we’d start looking toward the $50K region for suppport.

Deviation below Bitcoin’s daily range of $61K to $73K before FOMC meeting

The good news is that bitcoin did just that—it bounced right back above the range low. The Fed softened, saying they didn’t expect any hikes and were going to consider cuts if the labor market keeps softening, so the market took that as bullish, and the dollar sold off.

2. Bitcoin broke the downtrend

This was along several dimensions:

• Price downtrend

• RSI

• Trending dots

Another reason we’re getting bullish again.

Bitcoin break downtrend

3. The weekly did not breakdown

On the weekly chart, bitcoin stayed above the trending dots, and RSI didn’t put in a lower low.

Bitcoin weekly chart

What we’re looking for next

The latest price action is quite bullish, so the next thing we’re looking for is where bitcoin will make its higher low on price and RSI.

The primary case is that the low is in at $56K and so the closer price comes back to $56K, the better risk/reward ratio on a long trade. However, there are no guarantees, which is why you always want your stops to manage your risk.

Most bullish scenario: $63K higher low

The bull case would be to look at the price action from Jan to Mar.

In that case, bitcoin’s RSI came down as low as it went last week. Then price regained the trending dots, and flipped it to support. RSI also stayed above 50, using 50 as its support.

If this time is similar, then price would above above $63K now and head higher.

Using the Jan to Mar price action to project the bull case

Bull scenario: $59-61K higher low

Another potential is that price rejects at the 50DMA and then retests the range lows and 100DMA as support and bounces from there. This is quite common when price breaks back into a range.

Price retests range lows and 100DMA to create higher low

Bear scenario: lower low at $50K-$53K

The other scenario we still have to acknowledge is that price could still make a lower high and a lower low over the next two weeks.

In that case, we’d still be looking to the 50-$53K area as support.

Bearish scenario with support at $53K

Hope these scenarios were helpful, and good luck in the week ahead!

Jesse’s praying to the Market Makers for us all:

Twitter tweet

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Hello Snipers!

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Today, bitcoin followed through with another close lower—a close below the 100DMA, $60K, and the previous range.

So the natural next question is: If it doesn’t regain $60K…

How low can it go?

Jesse showed his target boxes to the downside in this tweet:

Twitter tweet

The truth is that no one knows how much it will go down, but let’s talk through a few different methods that people use to try to figure it out.

1. RSI

The first thing we look at to see when price might be bottoming is RSI.

Look for Bullish divergence + Higher low

The easiest to spot will be if RSI makes a bullish divergence—i.e., price makes a lower low while RSI makes a higher low.

If we see that, we start looking for RSI to put in a higher low and price to put in a higher low

The more powerful move to the downside or upside, the more likely we are to get bullish divergence.

In this case, we’re getting a high time frame reversal, so it’s more likely we will end up seeing bullish divergence before a reversal.

What if we don’t get divergence?

In some weaker moves to the downside, we don’t get divergence to prepare us for trend reversal, like this move back in January.

In that case, we have to look for RSI breaking above the trendline and the 50, along with price.

No bullish divergence in some trend reversals

Flip to higher time frames to spot trend changes

When RSI starts getting this low on the daily, it can be tempting to think the bottom is getting closer.

The best thing to do in this case it to flip to a higher timeframe.

For instance, if we flip to the 3D, we see that RSI is setting new lows and it’s below the trendline.

One strategy is to wait until the 3D RSI breaks that downtrend before getting back in.

RSI on 3D chart shows a longer term reversal

For instance, using the 3D RSI would’ve gotten you into the last move at $45K and out of it at $67.7K for a 49% gain.

Trading breaks of the 3D RSI line

2. Price targets

We look to price targets as a way to prepare ourselves for when the trend reversal might start.

There are a bunch of ways to identify price targets.

Moving averages

There are a few very popular high time frame moving averages: 100 day, 200 day, and 200 week.

Now that price has decisively broken the 100 day moving average, we look to the 200 day for support next at $49K.

The 200 week moving average is much lower at $34K, and moves up more slowly. Assets like $MATIC have already moved back to it’s 200WMA.

Popular moving averages

We don’t know which moving average it’ll move back to exactly, but we’ll look for trend reversals as it hits these levels.

Fibonacci levels

For any retrace, price will often revisit fibonacci levels (aka “fib levels”).

These measure what % of the move that price is retracing.

For instance if price went from $50 to $100, then a 50% retrace would come back to $75.

For the most recent move:

• 50% level is $53.3K

• 61.8% level is $49K

• 78.6% level is $44K

Once again, we don’t know which level price will revisit, but can look to those levels for potential reversals.

Fibonacci levels from the 2024 move

If you thought this was a bigger retrace, then you might take those fibonacci levels all the way from the bottom from Sep 2023.

Here the levels to watch would be:

• 38.2% at $49K

• 50% at $43K

• 61.8% at $38K

Fibonacci levels from 2023

There’s no right or wrong pivot points to take your fibs and look at a few different once can give confluence to an area.

Volume Profile

Another way is to take a volume profile. Areas where volume has been traded in the past can act as support when price is falling.

Few things to note on this chart:

1. Blue lines: Volume area high ($67K) and low ($33K) mark where 70% of traffic in the range is traded.

2. Red line: Point of Control is where the most volume has been traded ($43K)

3. And then we can see a small volume spike around $50K.

Price has lost the range above and seems to be heading toward the point of control.

Volume profile

Anchored VWAP

We can also pull the VWAP from the 2023 move, which gives you the volume-weighted average price (yellow line)

The VWAP tool will also give you 1 standard-deviation above VWAP (green line), 2 std dev above (blue), 1 std dev below (pink), and 2 std dev below (lower blue).

We can see that price has decisively lost the green VWAP and is headed toward the yellow.

VWAP

Here’s where you can find the Anchored VWAP and Fixed Volume Profile on TradingView.

TradingView tools

Liquidation Maps

Lastly, you can use liquidation maps, which show you where people place their stop losses (highlighted in green).

Price tends to like to go toward areas with a lot of liquidity, highlighted in green.

By this metric, we can see a lot of liquidity below $50K and above $73K.

Liquidation map

Summary

Bitcoin has now lost its range and its trending down, unless it can regain the range quickly with closes above $61K

The next most likely stop would be around $50K, where the 200DMA, VWAP, 50% retracement, and liquidation levels sit.

We don’t truly know how low it’ll go, but we’ll watch RSI to see if there’s a reversal at the different levels.

Want more of this? Less? Too detailed? Not detailed enough? Let us know!

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.

Today, bitcoin closed its monthly candle, and Jesse covered what it means in his livestream today

You can watch it below:

Twitter tweet

Bearish ideas

The monthly candle close for bitcoin was mostly bearish, so let’s cover those first.

1. Monthly chart closed with a reversal candle.

The Sharp Shooter Indicator closed the month with a reversal candle.

This is quite rare and should give us caution that this correction might take longer play out if the trend continues next month.

Bitcoin monthly chart closes with reversal candle

However, it’s worth noting that reversal candles don’t always follow through.

For instance, we printed this daily candle close, and then printed another eight bullish candles after, invalidating the reversal.

Bitcoin daily reversal candle that was invalidated

Jesse tweeted out a similar question about the monthly RSI chart.

Is this top in, like in 2021? Or will RSI go on to make higher highs, like in 2017?

Twitter tweet

2. Monthly candle was “bearish engulfing”

“Bearish engulfing” means that the April candle was red and closed below the March candle. This tends to be considered bearish.

Bearish engulfing monthly candle

In recent history, though, we’ve had 6 bearish engulfing monthly candles and half the time, they’ve turned green the next month.

Past examples of bearish engulfing monthly candles

3. It closed below 2021’s highest monthly close

Similarly, the highest monthly candle close in Oct 2021 was $61.4K, and April closed below this level at $60.6K.

However, it also closed above the Mar 2021 close of $58.8K.

4. New daily close lower.

On the daily chart, we got a new lower candle close below this range that we mentioned in yesterday’s newsletter we were watching.

Daily candle close lower

Bullish ideas

This monthly close is mostly bearish, but there are a few silver linings here.

1. For now, the $60K level held

$60K is a round number, and so some would say that closing below this psychological level is bearish. Bitcoin slightly avoided this fate.

2. A red month after 5 green months is natural

It’s important not to get too bearish. Bitcoin just had five straight months of green candles, so a red candle and consolidation here is natural.

Even a 50% retrace of the move over the next few weeks would bring us back to $50K, which would offer a strong support for a move back up.

This would also be ~30% correction from the top, which is common for bitcoin in a bull market.

Retrace to $50K

3. Price closed above the 100DMA

Bitcoin has yet to close below the 100 day moving average (DMA).

The last time it touched the 100 DMA was back in January before it started its next move up. RSI was at the same level it is now.

If we start getting candle closes below the 100DMA, then we’ll look to the 200DMA as the next level of support, which is around $49K right now but moving up.

Bitcoin daily chart

3. The daily wick is filled on Coinbase

Price briefly broke this major wick and closed above it, which means the wick down is now closed.

Large wicks are indicate imbalances in trading volume, and so price often likes to fill these imbalances before reversing a trend.

4. Correction in time is getting closer

Corrections often don’t just play out in price—they also have to play out in time.

Price resets and so does sentiment, and that just takes time.

Right now, RSI has been correcting for about 62 days. In the last part of the run, RSI corrected 89 days.

However, it should be noted that the biggest movement down in price can happen when RSI is lowest.

Corrections in time.

5. Bull markets haven’t ended with BTC.D this high

Bull markets have never ended with bitcoin dominance at the highs. This would be an unusual bull market if this were the end.

BTC.D is still higher than usual for bull market to be over

What this means

When we put this altogether, this monthly close is still mostly bearish.

We’ll stay cautious and continue to watch RSI and price to make sure we buy the right dip.

We hope you’ll watch with us!

Want more of this? Less? Too detailed? Not detailed enough? Let us know!

Some love from our last newsletter, My Tweet on Bitcoin:

Want to learn more about trading?

If you love charts, then make sure to follow our posts, videos, & live streams here:

• Jesse Olson Twitter (66,000+)

• Jesse Olson Youtube (2,400+)

• Market Sniper Twitter (8,000+)

Ready to block out the noise? Join us in the discord with either one of the subscriptions by signing up here: Market Sniper Website

Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.

Today, Jesse released this tweet on bitcoin price action that we’ll expand on today:

Twitter tweet

Let’s go through each of the bullet points for what Jesse’s looking for to tell him the bottom is in.

Daily chart cautions

Daily close above $73.1K

Right now, bitcoin is stuck in a range between $61.1K and $73.1K.

One of the most definitive signals that the bottom is in is when bitcoin starts making daily candle closes above $73.1K, which would be new all-time highs.

It’s also bearish for it to make multiple candle closes below $61.1K.

Bitcoin daily chart with bullish and bearish closes marked

‘Buy’ signal on RSI

While there was a “Buy” signal on the daily candles with the Sharp Shooter 2.0 indicator, there was no buy signal on Sharp Shooter RSI.

A “Buy” signal on RSI helps improve the likelihood that there’s been a change in price momentum.

Bitcoin daily chart buy on candles but not on RSI

MACD bullish crossover

Similarly, there was no bullish crossover on MACD. It came close but there was no follow-through.

MACD on the daily chart.

Higher timeframe chart cautions

The weekly chart is also flashing some warning signs we should be aware of.

Weekly chart

Here are the cautions on the weekly chart:

1. It’s no longer in ultra bullish territory on the Sharp Shooter 2.0 Indicator

2. The trending dots on the Sharp Shooter 2.0 indicator are still catching up to price as price consolidates here.

3. There’s a “Sell” signal on the Sharp Shooter 2.0 RSI.

4. There’s a pending MACD cross, similar to what we saw back in May to Jul 2023.

Weekly chart cautions on bitcoin

Monthly chart reversal candle

Finally, there’s a pending reversal candle on the Sharp Shooter 2.0 indicator, which is quite rare.

Bitcoin monthly chart showing a reversal candle.

However, as we noted before, this is an area with some important monthly candle closes from the 2021 highs that bitcoin’s price is trying to flip into support:

Monthly candle closes from 2021

Jesse’s ending note

Jesse ends with the following note:

Jesse covers that double-wave scenario in today’s livestream—both a very bullish scenario and a very bearish scenario.

Give it a watch!

Want more of this? Less? Too detailed? Not detailed enough? Let us know!

Some love from our last newsletter, $FIL: Deepdive on the Filecoin Chart:

Want to learn more about trading?

If you love charts, then make sure to follow our posts, videos, & live streams here:

• Jesse Olson Twitter (66,000+)

• Jesse Olson Youtube (2,400+)

• Market Sniper Twitter (8,000+)

Ready to block out the noise? Join us in the discord with either one of the subscriptions by signing up here: Market Sniper Website

Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.