Trading Bitcoin? Read This.

The Blackrock Bitcoin fakeout. [Altucher Confidential] October 17, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Fink said he believes crypto will play a role “as a flight to quality.” Here’s the truth. [Hero_Image] Trading Bitcoin? Read This. [Chris Campbell] CHRIS CAMPBELL Dear Reader, 2017. Larry Fink, CEO of BlackRock called crypto an “index of money laundering.” He said, "I haven't heard from any clients that they want to buy cryptocurrency." Then, 2019. Signs of a shifting tune. A hint emerged: "There's a need to democratize the exchange of foreign currencies.” It was then when he made it official: "I do believe cryptocurrency could become a great asset class.” Early-2023. He's suddenly a full-blast cryptonaut. "Bitcoin is an international asset that's not based on any one currency. So, it represents an asset that people can play as an alternative.” Suspicious? Sure. Fast-forward to yesterday, Oct. 16, 2023. BlackRock: Prepping For a Bull Run? Yesterday, Fink said he believes crypto will play a role “as a flight to quality.” His announcement was on the heels of a rally that sent Bitcoin skyrocketing over 5% and other coins even more. The overall sentiment is a rumor -- a post on X -- sent crypto flying. Fink disagrees. He sees a larger trend at play. “This rally is way beyond the ETF rumor,” he said. “More people are running into a flight of quality like crypto.” For the record… I don’t really think Fink believes in crypto, and the paradigm shift it promises to unleash in money. His motivations are simple: He’s out to make money. And, indeed, if you understand what he’s up to, you could trade your way to incredible gains. BUT, here’s the thing… Trading is Hard I’m a crypto believer. I’m content placing my bets -- with a size that won’t keep me up at night -- and holding on for dear life. I’m also a horrible trader. And yet… Many of our readers are (understandably) interested in trading Bitcoin. For that, we defer to our Paradigm colleague, Greg Guenthner. Greg, if you don’t know, is our in-house technical guru. For over a decade, he’s helped build and lead small-cap and technical research teams. His analysis has appeared in Forbes, Yahoo Finance, Bankrate, and countless other publications. Every morning, he dissects countless charts and gives his readers an unbiased take on the markets. Today, we invited him to rap about the perils of trading on the news… How this applies to Bitcoin… And how to actually make money trading. Check it out below. Read on. External Advertisement [Bargain in Today's Market (SHOCKING)]( [Click here to learn more]( A commercially viable nuclear breakthrough will start producing huge amounts of revenue now for a $3 stock you HAVE likely heard of... But it's likely NOT in your portfolio. A key November announcement could begin a 10X run over five years... [Click Here Now (Before It's Too Late!)]( Headlines Will Be Your Downfall Greg Guenthner [Greg Guenthner] GREG GUENTHNER As a trader, here’s a sample of my philosophy: We have no edge in the markets… We cannot discover any magical formula that will give us an advantage over other investors… Fundamental information has no short-term predictive power… And, most importantly: Price is the most effective indicator we can use to time our buys and sells. While these concepts are relatively simple, they are far from easy to put into practice. Fortunately, the markets are gracious enough to give us another chance to get it right. Our best opportunities are always right around the corner, no matter how we’ve performed in the past. If we pay close attention and are willing to learn from our mistakes, the market will offer teaching moments we can use to get better every single day. A Big Bitcoin Fakeout One of these amazing teaching moments just so happens to be playing out this week. The story isn’t over yet, but the initial reactions as it began to unfold tell us a lot about how markets work in real time — and how emotional investors typically react to new information. It all started early Monday morning as futures were attempting to rally off their overnight lows. Bitcoin was also starting to tick higher after pushing toward $28K on Sunday evening. Traders were on the lookout for a bounce in the tech growth and crypto following Friday’s ugly performance. But they had no idea what would happen next… Just before the opening bell, Bitcoin suddenly exploded higher. It looked like it was starting to squeeze as the price jumped from $28K to almost $30K in just a couple minutes. But after a little digging, it appeared that this potential breakout move was triggered by a social media post. A crypto Twitter account with almost 2 million followers reported that the SEC approved BlackRock’s iShares spot Bitcoin ETF. Bitcoin was rocketing on the SEC approval news. There was just one problem: no other sources seemed to be able to confirm the information. After briefly hitting $30K for the first time since August, the rally began to unwind almost as fast as it appeared. By 9:45, Bitcoin was well below $28K again. Forty-five minutes later, the same Twitter account that initially spread the news was posting an apology: [ALC] Cointelegraph later revealed that they took a tip that turned out to be a fake Bloomberg headline. It’s still unclear whether this was a prank or someone attempting to manipulate the market. But as far as I’m concerned, the reasons don’t matter at all… You Can’t Trade the News To be clear, I don’t fault the folks at Cointelegraph for the SEC mixup. Whether the news is “real” or “fake” doesn’t really matter. What does matter is how the market reacts to the information. In this case, an extreme influx of buyers swooped in when the headline first hit social media, bullying the price of Bitcoin sharply higher. But what happened to these early news reactors? I suppose some of the more savvy buyers might have set alerts that allowed them to get in minutes — or maybe even 20-30 seconds — after the news broke. But there’s no realistic chance that any random trader was able to get in at the exact moment the market started moving. Accounting for slippage, I doubt it would even be possible to make a profit on a move like this. In a more likely scenario, you’d buy in the $29K range, then get stopped out minutes later as the move failed. Or, even worse, you would buy and then watch your position immediately sink into the red as Bitcoin reversed. This story isn’t over yet. Bitcoin did manage to slowly move higher into Monday evening following the initial attempt at $30K. But I have to assume there are more than a few traders with underwater positions who attempted to play the headline. The takeaway is simple: Don’t Trade on the News! You can’t trade the news or time your short-term buys and sells by the headlines. Whether you’re tracking a planned earnings announcement or a surprise event, it’s impossible to know if the buying or selling force from the initial reaction will continue. This is also one of the main reasons I never attempt to play earnings. You never know how a stock will react — even to solid numbers. The CFO could hiccup during the conference call and send the stock down 5%. Or, you might have to sit through a couple of false moves while the market attempts to sort out its final reaction to the new information. The purest breakouts in the market that are most reliable happen because of supply and demand dynamics. Aggressive sellers overwhelm demand, or aggressive buyers chew through supply at critical levels. Once resistance is defeated, the stage is set for an extended move that can play out for days, weeks, or even longer. That’s where the real money is made. Best, [Greg Guenthner] Greg Guenthner for Altucher Confidential Nvidia’s CEO Sparks $150 Trillion Megatrend Behind closed doors… He took center stage… And left the crowd utterly speechless. What happened? This tech billionaire revealed a breakthrough technology [that will change everything you know about making money](. (Experts are predicting a $150 trillion megatrend!) [See for yourself right here]( [Click here to learn more]( Could this be “The Steve Jobs iPhone Moment” for Nvidia’s CEO? [See the full story for yourself here](. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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