In the world of cryptocurrency, the upcoming volatility and potential traps are the focus of discussion. The market is still roaring, with Dogecoin being the big outlier due to Elon Musk’s tweets. The monthly chart shows a potential accumulation phase, the weekly chart reveals recapturing of the 255 moving average, and the short-term moving averages are finally pointing upwards. But caution must be exercised, as there is potential for a trap if prices fall through the support level at $18,000. The potential trap levels are identified, and traders are advised to enter the market slowly with risk management.
HTML Heading: Understanding the Potential Volatility and Trap Areas in the Crypto Market
HTML Heading: Dogecoin and Elon Musk’s Tweet Pushing Its Rise
In today’s show, we will discuss the ongoing market volatility and potential trap areas in the crypto market. The chart for Crypto bubbles shows that the market is still going strong, with Dogecoin being the biggest outlier. The reason for its rise is Elon Musk’s tweet, where he confirmed his plans to integrate Dogecoin into Twitter. This move makes Dogecoin something to watch out for seriously. The speaker also highlights that he has taken a small position in Dogecoin.
HTML Heading: Analysis of the high time frames
The speaker looks at the high-time frame where he notices that we have the histogram, which has changed color and slowed down a bit potentially building momentum for potential upside. The RSI on the monthly chart is ticking up, indicating a potential accumulation phase. The speaker indicates that the bear market is starting to slow down, and we are coming into a sort of accumulation phase.
HTML Heading: A review of the weekly chart
On reviewing the weekly chart, the speaker notes that the RSI is breaking through that trendline but cautions that we need to wait and see how the week closes. A trap scenario is still possible if the price loses certain levels and falls below the support level at 18,000.
HTML Heading: Levels to Recapture
To avoid a trap situation, the speaker highlights that we need to recapture the 200 MA and 200 EMA. These levels to clear are around $24,000. He adds that to be entirely safe; we need to get above $25,500.
HTML Heading: Identifying a Trap
The speaker cautions listeners on what a trap situation might look like. He shares that every time there has been a trap, it has looked something similar. We recaptured the moving averages, push into the next moving average, and then reject from there, which lead to quite a nasty move to the downside. To avoid a trap situation, the speaker recommends being cautious and looking out for a couple of days of price action holding above these moving averages.
HTML Heading: Understanding Low-Time Frame
The speaker then moves on to the low-time frame and shows listeners how to identify a trap situation in the Altcoin Perpetual Index. As long as the levels are not breached, the potential for a rally remains. If the lows get breached, however, listeners need to be cautious and fully exit their altcoins, as this might indicate the start of a trap.
HTML Heading: Risk Management
Wrapping up the show, the speaker advises listeners to enter slowly into the market in long positions, have some exposure, and manage risk carefully. He shares that he has entered approximately 10%. As Bitcoin clears $23,000 on a closing basis, the market will be much safer, and altcoins will rally exponentially. Entering the market slowly will create a less risky environment for listeners.