Daily Market Update - May 7, 2020

$BTC 24 Hour High $9,411.47 $BTC 24 Hour Low $8,973.25 $BTC +2.13%

US-China finger pointing continues as Trump compares the COVID-19 to Pearl Harbor and 9/11 as one of the worst attacks on the country. State governments are starting to open up with the reported ~22M jobs lost last month across the nation pressuring action.  Digital assets market:

  • $BTC halvening t-minus 5 days. 

  • Overall digital asset market cap is about to reach 250B as $BTC bull run reignites after two days of range bound of $150 (8,850-9,000) activity, prices went as high as 9,400s before correcting down to 9,200 levels currently. 

  • Futures market breaking 20B in daily volumes across all large platforms. $BTC Futures volumes for the past three days have been declining, averaging around 16B. Open positions increased by 140M overnight, currently at 2.14B with 12M short contracts liquidated on yesterday’s move. 

Alt markets:

As we approach the halvening, the spotlight remains on $BTC as alts continue to lose ground in the market cap race

  • Top 10 large-cap alts were in the red with $EOS and $LTC dropping more than 3% over night as $BTC was the sole coin in the green. 

  • $LINK also lost a bit of momentum after a strong April performance that it saw it decouple from $BTC movements. Still in the green, and currently trading below the 20 day SMA on Bollinger bands

  • $EOS -3.76% @ 2.66

  • $LTC -3.13 @ 45.3

  • $LINK +1% @ 3.62

Trade Idea:  BTCUSD Long, the trend is your friend 

Up or down? Is the halvening immediately bullish or bearish? Will it be a “sell the news” kind of event, even if it’s never been a rumour? Will the uptrend last longer? Is there still a positive correlation between traditional markets and $BTC? There have been just a few times where so many significant variables  could impact $BTC’s price such as right now.

Technically speaking we are definitely in an uptrend, and as you know, the trend is every trader’s friend. Additionally, it appears that $BTC broke out from a pennant that started forming almost a week ago and it has been bouncing on a diagonal in lower time frames. Let’s dance to the trend’s music.

Ideal entry would be close to $BTC’s diagonal support, which also matches the mid point of the trading range. Conversely, traders can wait for a clean breakout from the range and into new monthly highs. Additionally, given the halvening is just days away, it’d be appropriate to either take profits if the trade goes as planned, or at least put in place a stop trailing loss order to protect profits.

Key levels for this trade are:

  • Entry Price: $9,030

  • Stop Loss: $8,720, below the midpoint of the trading range 

  • Take Profit: $9,940

Traditional markets:

DOW and S&P started its morning strong before trending down in the afternoon, closing the session at ~80bps below. On the other hand, NASDAQ was able to sustain the morning momentum and closed up +61bps.

  • $DOW -0.91% @ 23,664

  • $S&P -0.7% @ 2,848

  • $NASDAQ +0.61% @ 8,984

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