Bitcoin & Ethereum Trader

By George Protonotarios

Throughout history, technology and innovation created investment opportunities, and the decentralization of the financial industry is the mother of all opportunities. Considering the rate of adoption and the network effect, Bitcoin and Ethereum have by far the best chances of success.

This book contains all the essential information about how to successfully trade the two dominant blockchain protocols, Bitcoin and Ethereum. It combines technical analysis with fundamentals, on-chain data, and market sentiment.

Chapter 1 begins with the crypto market cycle. The crypto market cycle is very short and lasts only four years. Chapter 1 also includes seasonal patterns. Bitcoin performs very well during the fourth quarter of the year, while Ethereum performs exceptionally well in the first semester of the year.

Chapter 2 includes methods for identifying the trend. Chapter 2 also introduces a new chart type that is ideal for analyzing volatile asset classes. It is called ‘PriceMomentum’ and incorporates price momentum and periodic volatility.

Chapter 3 presents a variety of methods for recognizing market tops and bottoms at an early stage, starting with the crucial role of the trading volume. In addition, you will learn about the brand-new RSI Precision, and MACD. Also, you will learn about the Wyckoff Schematics, which are quite applicable in the cryptocurrency market.

Chapter 4 examines the powerful signals of on-chain analysis. You will be able to find several on-chain indicators that can predict market tops and bottoms, such as the Puell Multiple, NVT, Unrealized Profit/Loss, and others.

In Chapter 5, you will learn about the role of derivative products in the cryptocurrency market. You will learn about Open Interest and the Commitments of Traders report, and how to explain a significant premium/discount in Bitcoin Futures.

Chapter 6 investigates the role of Bitcoin dominance in the general market cycle. Typically, each cryptocurrency bull market starts with a Bitcoin rally and a Bitcoin dominance surge. History isn't bound to repeat itself, but knowing these patterns may prove extremely useful when trying to time your investment decisions.

In Chapter 7, you will learn about market sentiment. You will learn how to distinguish between the experts’ sentiment that you should generally trade in line with and the public sentiment that you should generally trade against. Moreover, the ‘Fear and Greed Index’ and the crypto funding rates reflect the expectations of retail traders and can often indicate overbought/oversold market conditions.

Chapter 8 examines the relationship between cryptocurrencies and traditional markets. Liquidity in the global financial markets functions like water in communicating vessels. However, each asset class has a different risk/reward profile, and thus the impact of the flowing liquidity into the system is not the same for every financial market. Chapter 8 also investigates the correlation between Bitcoin price, the US dollar, gold, and equities.

• Language: English
• Publisher: George Protonotarios
• Release date: Aug 26, 2021
• ISBN: 9781005651909

George Protonotarios

George Protonotarios is a Professional Financial Analyst and a Financial Content Writer.

Book preview

© George M. Protonotarios 2021

Bitcoin & Ethereum Trader -Copyright July 2021

COPYRIGHT INFORMATION

ALL RIGHTS RESERVED.  No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing of the publisher, nor be circulated in writing of any publisher, nor be otherwise circulated in any form of binding or cover other than that in which it is published without a similar condition including this condition, being imposed on the subsequent purchaser.

DISCLAIMER AND LEGAL NOTICE

This book is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services or advice by publishing this book. Each individual situation is unique. Thus, if legal or financial advice or other expert assistance is required in a specific situation, the services of a competent professional should be sought to ensure that the situation has been evaluated carefully and appropriately. The author and the publisher disclaim any liability, loss or risk resulting, directly or indirectly, from the use or application of any of the contents of this book.

The information presented in this book represents the view of the author. Every attempt has been made by the author to verify all information included in this Book, but there is no guarantee about the accuracy and the reliability of any information presented in this book. This book is not intended for use as a source of financial or investment advice.

RISK WARNING

There is considerable exposure to risk when trading Forex, Futures and Options. Trading Forex and other leveraged products involves a significant level of risk and is not suitable for all investors. Before undertaking any such transactions you should ensure that you fully understand the risks involved and seek independent advice if necessary. The possibility always exists that you could sustain a substantial loss. Never trade with funds that you may need in the future. Past performance is not necessarily indicative of future results. Any opinions, suggestions, brokers, systems, services, software, reviews, promotions, bonus, rebates, links and web-sites mentioned on this Book are provided as general market commentary, and do not constitute investment advice in any way.

PREFACE

"Study demand, supply, and volume, manage your risks, and trade contrary to the public sentiment"

Since their inception, cryptocurrencies have pushed the limits of traditional finance by proposing a new monetary ecosystem and creating a brand-new investment asset class. This new asset class is characterized by continuous innovation, unseen price volatility, and a parabolic bull run every four years. Throughout history, technology and innovation created investment opportunities, and the decentralization of the financial industry is the mother of all opportunities. In this context, cryptocurrencies are destined to become a dominant asset class in the future. Nevertheless, we don’t know which protocols will succeed and which will fail. Considering the rate of adoption and the network effect, Bitcoin and Ethereum have by far the best chances of success. That is why this book exclusively focuses on these two protocols. However, no one can predict the future with certainty. If you want to trade successfully, you need to remain open-minded and realistic regarding the future. There is no room for maximalism in the mind of a wise trader.

Successful crypto trading requires realism and risk control

Crypto trading offers everything a trader could dream of, strong macro trends, price volatility, and significant liquidity. However, that does not make it an easy task. On the contrary, crypto trading is an extremely challenging task. If you are caught up on the wrong side at the wrong time, you could lose most of your funds in a matter of days. A 50% drop in a few days has happened before, and it will happen again. That is why crypto traders must always stay realistic and constantly focus on the risk side of their trades. Think and evaluate any trade in terms of risk/reward and always seek confirmation before opening any position. The best way to confirm your decisions is by studying and understanding the three basic market dynamics: demand, supply, and volume.

Avoid trading leverage -It is a liability, not an asset

Trading with leverage is only useful when trading non-volatile markets, such as the Foreign Exchange market. Volatile markets, such as crypto, are not compatible with the use of trading leverage. How can you leverage your trading positions when the price of Bitcoin can lose 15% in a single day? It makes no sense. You can’t possibly manage such extreme risks when trading on margin. Remember, if you lose all your chips, you can't bet anymore. The name of the game is to stay in the game. Trading leverage reduces the probabilities of staying in the game. Thus, avoid all types of leveraged crypto products, at least until you become an expert.

If many are doomed to lose, we must trade contrary to the public sentiment

Today, there are an estimated 10 million traders on the internet, a number that is constantly growing. However, the vast majority of these traders lose money. We do not even need to look at the statistics to confirm this. It is enough to think that trading is a zero-sum game. As a few people are making a lot of money, there should be many others constantly losing.  This is an important clue to always keep in mind. If many are doomed to lose, we must trade contrary to the public sentiment.

In short, study demand, supply, and volume, stay open-minded, manage your risks, and trade contrary to the public sentiment. That is all you need to do to