Market Analysis - CARDANO, BITCOIN & FOREX 19th January

hi traders welcome back to this week's
market
hi traders welcome back to this week
hi traders welcome back to this week's
market analysis my name is matthew from
zen in the art of trading
and i will be your guide for today
[Music]
it's a beautiful sunny day here in
queensland australia i just got back
from the beach
it was hard to leave but we all have
work to do
so today i'm gonna break down a couple
of markets
um the forex markets are actually quite
boring at the moment so
certainly the first few weeks of the
year so that's normal so today i'm going
to be breaking down
a couple of forex pairs a couple of
crypto
markets and the s p 500. so let's start
out on euro dollar let's get the forex
pairs out of the way first
so last week i pointed out that this
euro dollar had just broken out of this
sort of
minor lower trend line indicating that
there
may be some bearish momentum about to
kick in since this market has been
moving upwards for quite a while now so
it's natural to expect some relief at
some point
and when this candle here broke this
lower trend line i
expected this market to move a bit lower
and i was
i felt like it was likely that this
market would be drawn to this 50 ema
and this previous swing low here
the reason for that is that when a
market is trending strongly
above the 50 ema
when relief does come in it's often the
case that this 50 ema
a lot of traders are watching it and so
can often act as
a dynamic support level and when this
level comes in confluence with a
previous
support level it can be quite powerful
you can
get some nice bounces out of this sort
of price zone
and so that's what i'm still expecting
this week not much has changed on this
market
now last week i pointed out my support
resistance levels
this swing high in here is not a
technically a major
resistance level but i do find it to be
an interesting level
the reason for that was if we get out
our uh
volume profile fixed range tool
and we draw this zone out uh the most
amount of volume traded on this market
was literally
right on this price this two three two
seven
one zone and as soon as price got back
up there it sold off from there so that
i found that
interesting that's not a form of
technical analysis i often apply in my
trading at least not in the forex
markets i do use
uh volume a lot in the crypto markets
but on 4x i don't but maybe i should
this is uh
quite an interesting observation here
but anyway
this market is now hovering at a pretty
important level
according to my analysis because if it
breaks this level
uh then it's likely that we are going to
see this market move
quite a bit lower how much lower i don't
know uh
probably certainly if it does break this
zone we'll be testing this previous
resistance zone
at some point so that could be an
interesting level to look for
counter trend trades so if we do break
trend here and we come down into this
zone that could be a great level to look
for
potential bounces out of this market
alternatively if we
do move higher then up in here
let me delete that uh is going to be a
definitely a key level that a lot of
traders are going to be watching so
these are the
basically three levels i'm watching this
week
i'm keeping a keen eye on this zone in
here for
a potential bounce and we've already had
some interesting price action patterns
in here which i'll go over in a second
but if we do continue lower this is a
zone
that i will be looking for potential
trading opportunities trading setups
namely double bottoms um large wick
rejection candles like hammer candles
anything that's showing buying pressure
stepping in strong buying pressure
that will make for a potentially great
trading opportunity and likewise if we
do rally from here
uh i'll be keeping an eye on this
resistance level here
just since it did push this market
around a fair bit
but it's not a major level so it's only
been it's only acted as resistance once
uh in the past several years if we zoom
out our chart
uh this did not act as resistance in
here at all it was just the middle of a
consolidation period
um so i'm certainly paying closer
attention to this zone up here
wow why is that so big uh this zone up
here
is much more important according to my
analysis and so i will be
paying closer attention to this upper
resistance zone unless we get a very
clean double top
in this zone up here i'm not looking for
short trading opportunities up here but
if i do go long from down here and we
get uh and price begins to struggle up
here that will be a zone i'd be
willing to take profit in reason for
that is if i do go long from down here
i get a nice tight stop loss there's a
very nice risk reward
back up to this high so if price does
show signs of struggling up here
and i do happen to get a long trading
signal from down here
uh then that will be a great place to
take my money
so that's it really for this market
we'll drop down to the four
hour chart there's not really any price
action patterns unfolding down here
this is the zone i'd be paying attention
to on these lower time frames
and uh go to a one-hour chart
we did get a nice some nice rsi
divergence in here
you can see that the rsi is making
higher lows
while price action is making uh lower
lows and then we got a very nice bullish
engulfing candle
right here
i don't know how this happened but i
just noticed that my um
my time down here is in half hour
increments
and i'm on the hourly chart and somehow
i have no idea how this happened but my
time zone has been set to
utc plus um that is certainly not where
i live
so i'll change that back to there and
yeah you see that that particular setup
if you look down here
occurred at midnight my time last night
and i was asleep at that time because i
need my
beauty sleep i'm not very good looking
the best of times so
i need as much sleep as i can get and i
miss this trading opportunity this is a
trading opportunity i would have taken
if i'd been awake nice bullish engulfing
candle on this one hour chart
after rsi divergence right in this
zone right in this potential support
zone
i could have got a nice risk reward here
what's that 13 pips
13 plus 12 25 pips
easy one to one target up to this 50 ema
i typically trade two positions um
with most of my strategies my first
target is taken at one to one and then i
move my stop-loss to break even
and let the second position run just in
case we break through this
and continue higher then i trail my stop
below swing lows
that's how i would have approached this
particular setup but i was not awake for
that unfortunately so i missed out on
that one
but that happens in trading and i'm very
used to it by now
and it's worth noting that we do have a
very nice
hammock candle here it's bearish but it
is considered
by my rules as a hammer candle reason
for that is
it closed in the upper third of this
candlestick as you can see there the
entire body of this candle is in the
upper 33 percent
of this candle range that counts as a
bullish
or as a hammer candle to me so
interesting price action patterns
unfolding in this zone
against this 50 ema so yeah if we do
just happen to blow through this level
uh it couldn't also make for an
interesting
trend continuation level to the downside
or we're not technically in a bearish
trend yet but on these uh lower time
frames we are so on a four hour chart
this could make for a nice
trend continuation level you can see
that we have made this move down here we
double topped up here and then we've
come down made a lower high
made another lower high broke through
that made another lower high
and now we're down here if we make yet
another lower high up here somewhere
or on this 54-hour ema we break through
this level
this could make for a good trend
continuation level to the downside
on these intraday time frames so keep an
eye on that if you're a day trader
now let's move on to the next market
which is canada yen
so last week i was pointing out this
potential resistance zone up here
price action uh was in this zone
i believe we were here and i was
pointing out that there were
or there was a potential trading
opportunity on the intraday time frames
in this zone but before i
get on to that let me just point out why
i thought this zone was important
should be pretty obvious to the trained
eye
oh my goodness we have
been uh we have tested this zone as
resistance once
twice now thrice and we have acted as
support in the past
and resistance in the past so this is a
major
level and we do have an even handle
number here 82 even
but there's a lot of factors here that
would lead
a structure-based trader to identify
this level as a major
zone of structure and i did
in fact identify this as an important
zone and on the one hour chart we had a
nice
potential trading opportunity here where
similar to euro dollar we had rsi
divergence
initial high higher high bearish
engulfing candle
lower highs on this rsi good potential
trading opportunity
nice risk reward profile i mentioned
that uh
the 50 ema here would have made a great
target since this was a counter trend
trade
since the market is making higher highs
and higher lows i would be conservative
on my targets if i were to have gone
short here
but the market did in fact roll over
quite a quite a bit
from this zone and so depending on your
trading strategy your trading style
how aggressive you are how risk tolerant
you are
um you could have caught a really nice
move out of this zone
and then price action did come back up
into this zone yet again
and struggled yet again we didn't get a
single candle closing above this zone
we had some nice rejection wicks and the
market rolled over from there
so that's interesting to note um on the
four-hour chart we did get a nice
bearish engulfing candle here if you
look at the right side of my chart
that is a trading setup i like to trade
in these zones on the four-hour time
frame
this bearish engulfing kennel closed
lower than the previous candle
and we were at the high of this zone
it's a nice
trading opportunity so nice trading
opportunity there we've since
found support again at this low
and this market is in an uptrend this is
the last line of defense before this
uptrend is considered invalidated
it has held and so the uptrend is still
intact and so i'm actually expecting
this market to move higher
from here potentially i'm not trading it
but
that's what i'm expecting the moving
average is moving to the upside we have
higher
lows coming in if this continues
then we could see a breakout of this
zone to the upside and i'd say that's
likely at this stage
given what this market is showing us i
don't know if that'll happen this week
it probably won't but it could
and if it does this zone will make for a
fantastic
trend continuation zone if we do get
that breakout if we retrace here find
support
somewhere in here or on this 50 ema or
even if we come lower and re-test this
low
as long as we don't break below this low
if we can come up here and consolidate
and then we get a nice clean breakout of
this zone that would be phenomenal
because uh if price action does retrace
back into this zone
it's extremely likely to act as support
push this market higher
and provide a great intraday swing
trading opportunity
or train continuation opportunity so
that's what i'm looking for on this
market
and that's all i have to say i pointed
out my key levels last week
if the market does move lower i'm paying
attention to this
zone in here as potential support if it
does break out to the upside i'm
not considering any short trades until
uh up here ideally i mean there are a
few structure zones in here you could
consider this
a potential resistance zone as well
just because it's acted as resistance
support a few touches of resistance and
support in here
and of course through here
through here but it's not as clean as up
here so
i'd be conservative taking trades in
here i would probably prefer to see a
double top rather than just an
aggressive engulfing candle
so those are my levels going forward
into the coming weeks
on this canada yen market
let's move on really quickly to the s p
500 because this one
is going to be quick and easy to cover
i pointed out my key levels last week
this swing high in here it's going to
potentially act as a major level
this 50 ema is going to potentially act
as a major level because as i mentioned
earlier
on euro dollar when a market is trending
strongly like this above
this these moving averages the 50 ema 25
em 800 ema 200 ema
doesn't really matter um all of these
ema's come into play
when a market is trending strongly above
them and so you can see here this 50 ema
has acted as support
multiple times in the past and it has a
history of doing that
looking left over several years once it
gets below it it can often act as
resistance and once it gets above it
can often act as support so i'm keeping
an eye on this 50 ema as this market
flattens out a bit but also this
um previous swing high in here where
this blue line is was a level i pointed
out last week that was likely to act as
potential support since we are in an
uptrend
we broke above this high we've come back
and retested this high
and it is now acting as support and
pushing this market higher
no surprise there that's what markets
tend to do when they're trending
so if you're long like me then
uh this would be a good place to try
your stop-loss or just keep an eye on
especially on intraday time frames like
four hour one hour chart if price does
come back down
and we get a close below this swing low
it could be a sign that this market
wants
to begin correcting if that does happen
this 50 ema is a zone i'm going to be
watching for potential bounces and this
structure zone in here is a
structure zone that i will be paying
attention to for potential counter trend
bounces uh and that's it for the s p 500
bullish
coming into this week there's not really
any resistance zones to point out
because we are
in blue sky territory we're in
unprecedented highs just like bitcoin
which i'll get to in a minute
there is no price action looking left
that we can use to reference for
structure
which indicates this market is extremely
bullish don't ask me why
given the fundamentals and the covert
situation but the market has voted that
this
is an extremely bullish asset and it is
continuing to go higher
and it will continue to go higher until
uh we are given reason to believe it's
not going to continue higher anymore
things that would glue us into that
potential possibility would be a double
top up here but
most importantly we need to see a one
two three move
that breaks a previous swing low and
prints a lower high
once we get that we could have a
potential trend reversal on our hands
so keep an eye out for that on this
market that's all i have to say for the
s p 500 let's move on to bitcoin
so last week i pointed out this zone in
here this 3400 zone
sorry 34 000 3400 we're well past that
now
this stage on bitcoin on this four hour
chart
i was paying attention to this swing
high in here and i thought this could
potentially act as support given we are
in an uptrend
uh we re-tested these lows in here
failed to break them
continued higher and now
until we break this swing low in here we
are still in an uptrend
now we're consolidating we're going
sideways on bitcoin now
but we are technically bullish this is
bullish consolidation
but even in consolidation there are
still trading opportunities
i can see an advanced pattern that
formed on this market here if i bring
out my
fib retracement from this swing high
down at the swing low
we have a bat pattern so here on this
market we have an
x to a leg an a to b a b to c
and then a cd completion up at this 786
fibonacci retracement so this pattern
would look something
a little bit like this and the way i
personally like to trade this pattern
these bat patterns
is i go short i place a limit order at
the 786
retracement and i have a 180r stop loss
above
the x point so in this case 2500
plus 1800 atr
is about a 4 300 pip stop loss
should be around there and i like to
take my targets
at a 382 retracement from my um
a leg from x to a up to the 70
786 retracement so that's this
382 down here so now if i delete all my
fibs
there is a profitable bat pattern that
played out here
that hit targets already only a 1.1
risk reward but this just demonstrates
that even in consolidation
you can still find profitable trading
opportunities
but that's an advanced subject that i'm
not going to go into any more detail on
here
if you want to learn how to trade
advanced patterns stephen hart has a
course
advanced pattern mastery course go and
check out the trading channel
on youtube and you can find out more
information about that but they're
phenomenal trading patterns that work on
every market i've ever tested them on
so go and check that out if you want to
learn how to make sense
of potential trading opportunities in
sideways markets
choppy markets like this what i mean by
bullish consolidation
is that the overall picture the higher
time frames daily and weekly chart
indicating that there is a higher
probability of this market continuing to
the upside
than to the downside so on these lower
time frames four hour one hour
even the 15 minute any consolidation
that
appears on your chart should be treated
as a
pause in a bullish market so
something like this like a flag pattern
even though
uh this consolidation on bitcoin is
getting ugly
uh bitcoin is still beautiful on the
inside and so
i'm expecting this market to potentially
at least retest these highs
around 40k if not break them and
continue
higher but that could take a bit of time
so let's
just go over what i was talking about
last week was this swing high
potentially acting as support that
didn't quite happen
uh we did we did find some support in
here these wicks on lower time frames 15
minute 1 hour chart
provided some pretty nice bounces but
then eventually we did
close below this level and continued
lower however we did not
violate these previous swing lows in
here
in this trend which means uh we're still
bullish on this market
we did in fact rally here and re-test
40k
not quite a double top um but not on
this time frame anyway if we go out to
the daily
there's still not quite a double top and
since then we've just
but we're coiling this is a price coil
given where price action currently is uh
there's no reason why it won't roll over
to the downside from here versus
continue higher
because we are in consolidation so what
does that mean
that means i'm just sitting on my hands
being patient
waiting to see if price action can
re-test the bodies of this high
or if we get a breaking close below the
swing low if that happens
this 50 ema is likely to provide a
bounce if we do
break through this 50 ema could provide
a nice bounce
if not then 24k is a key level that
identified last
week that i'll be paying attention to
but for the most part i'm just
sitting on my hands here it's not a bad
idea if you're long
on this market and you're in significant
profit this would be a good time to
scale out
take some profit off the table you can
always buy back in
if we break out to the upside or if we
get a nice correction you can buy in at
a cheaper price
buy low sell high that's the game so
that's what i'm doing on this market
i've taken a little bit of profit on
some of my altcoins
but i fully intend to buy back in when
an opportunity presents itself so i'm
not bearish on this market by any
stretch of the imagination but i
am cautious uh i am
taking some money off the table just in
case because we are
pretty overextended here and we're
clearly running out of steam
at least in the short term so really
that's all i'm looking at on bitcoin
let's look at one last market
which i am personally pretty heavily
invested in
and it's uh a project i've been
following for a few years now
i think it's very interesting very
promising they've got a phenomenal team
working on it and uh it's quite a
controversial
project in the crypto space uh because
of all the stupid tribalism
in crypto traders get far too emotional
in this market
um that's why i'm not a part of any
trading communities relating to crypto
i just keep my head down and just trade
it quietly uh
keep my thoughts to myself for the most
part but this market i'm talking about
is kadano
kidano is a project i've been invested
in
since 2017 and i
do have quite a large position
accumulated
from around two cents us dollars
and we are now at 36 or 38 cents u.s
so quite a phenomenal gain on this
market
of around 1 600 percent you don't get
those sorts of gains
in many markets these days but i'm very
happy to have caught this
project when i did but just because i
like this project doesn't mean that i'm
blind
to its technical analysis dangers so
let's
break down this market right now i'm on
ada versus us tether
us dollar tether i personally like to
trade
these markets using tether because it
allows me a
much better buying power when the entire
market goes down
so obviously for most people the name of
the game is to accumulate more bitcoin
for me it's just a profit whether that
be in bitcoin
us dollars uh kedah no
it doesn't matter to me as long as i'm
accruing more profit
more wealth and on this particular
market i like to trade it
against the u.s dollar and right now
i'm looking left this market is a is a
young market it's only been trading
for what four years now and binance has
only had it listed
we're on finance here if you were
wondering finance has only had this
asset listed
against u.s tether since april of 2018.
so we don't have a lot of price action
looking left but we do have this major
swing high in here
at 38 cents roughly give or take a cent
or so and that's where price action is
right now testing
and so i've taken a bit of profit off
here yesterday i was watching this
market closely
and i was on the 15 minute chart
actually and this is where i sold my
position
well twenty percent of my position i'm
still holding a significant portion
because i
i prefer to have time in the market on
these particular markets
than uh trying to time the market but
being a trader i can't resist
trading even my investment positions
and so i sold a portion of my holdings
up here on this red candle here reason
for that
was we double topped up here on this
15-minute chart
we are in this major zone of resistance
potential resistance
um and so i took off um i don't know
several thousand dollars worth of of um
kidano
in u.s tether sold up here at around 39
cents
now i'm waiting patiently to buy back in
um i have a few buy orders down at this
30
uh 34 cent mark reason for that
is it's a previous swing high we are in
an uptrend a very strong healthy uptrend
so there's a good chance that if this
market does move lower from this
resistance zone
that we may find support in
this previous swing high zone so i have
some buy orders at 34 cents
and i'm also willing to buy back into
this market if this market does make a
higher high
at around 40 cents so if that happens
i'll probably wait for a pullback
try to buy in again but right now i am
comfortable
taking some money off the table given
the fact that we are at this major
resistance zone
and we are clearly struggling to get
out of this zone obviously i just
mentioned this swing high in here
is where i'm paying attention to to
potentially buy back in
if this market does find support there i
have some limit orders sitting here so
i'll keep an eye on it when they get
filled
if we blow straight through this level
i'll just sell again and wait until this
previous swing low gets tested but
anyone who's been
in crypto for any length of time knows
that good deals in crypto don't last
long so if this market does have a
quick rapid sell-off into this previous
swing high and i'm not at my charts to
watch it
i want to be able to buy back in quickly
just in case we do
get one of these big wicks to the
downside and price action dips below and
then
shoots back up that's a common
occurrence in crypto
and so i'm prepared for that if however
this market does sell off and i pick up
my orders here and it continues to sell
off
it's not a big deal to me because i'm
holding crypto i'm holding kadano for
the long term i'm expecting this to hit
at least 50
u.s cents this year or next year if we
go into another crypto winter this
market
is is is a strong project
uh it's got a bright future ahead of it
like many projects in crypto
and if we load up a different market we
go to bittrex
which has a lot more price data uh you
can see that this market has in fact
been a lot higher than 50 cents
in the past during the crypto bubble
days of 2017 and early 2018 we got as
high as
uh nearly a 1.40 us so i'm expecting
this market to get to a dollar u.s
at some point in the next year or two
hopefully sooner than later
but in this medium term in the short
term
there's no reason why this market won't
sell off a bit so
i'm preparing for that situation
i've taken some profit and i'm waiting
for a good sign to buy back in
so let me go back to finance
and point out my key levels so um this
swing high
obviously and then this swing low reason
for this swing low
is that we are in an uptrend and this is
the last line of defense
in here if price action can close below
this swing low then there's a very good
chance that this market is heading lower
again
which would be sad but not impossible so
i'm preparing for that eventuality as
well
i'm keeping an eye on this swing low in
here but i'm not expecting that
necessarily in the months to come
i would expect more likely that this
market will just continue sideways for a
while and consolidate
and if that does happen i would expect
these lows to be the low of this
consolidation range so we'll have to
wait and see what happens there
again this 50 ema could be a significant
level as it rises and rises
price action comes down to test it could
be a great
trend continuation opportunity as you
can see this market does like to respect
the 50 ema as support and resistance
uh when it starts trending so keep an
eye on this 50 ema on this market if
you're trading this market
end this swing low and this swing high
good buying zones
and then finally before i let you go
i thought it'd be prudent to check the
cardano versus bitcoin chart since that
is what dictates the price value of this
asset
let's go over to that market here
and the reason why i sold my position
yesterday is because this market
is um hitting up against u.s
tether resistance and bitcoin resistance
so here on ada versus btc we have this
swing high in here
which has acted as resistance multiple
times in the past if i
go you've got to look a fair ways back
on this market but in here we have acted
as support
support resistance through here a little
bit
and this is this is a key level another
key level
uh if we do blow straight through here
is this one up here
resistance resistance resistance
resistance
so if we get up to 1183 satoshi's on
this market this could be a potential
potential resistance zone it's acted as
support and resistance multiple times in
the past
but for now in immediate price action
we've had this strong rally a nice
break out of this resistance zone which
is really good to see that that's
further confirmation that this bullish
mark this bullish trend
on kadano may continue uh it's bullish
against the us tether
and against bitcoin at the moment we've
had this nice one two three
uh move so as this market pulls back the
swing highs i'm paying attention to is
potential
support against bitcoin and of course if
this rallies against bitcoin it's going
to rally against u.s tether
and so that's why i'm being conservative
on my buy-in
here on tether and i'm expecting to
swing higher
34 cents uh i don't want to have my
orders any lower than that
just in case this trend against bitcoin
continues because if this market
continues
appreciating in bitcoin valuation then
it's going to
skyrocket in usd valuation especially if
bitcoin continues
being strong because naturally if
kidano is worth more bitcoin and bitcoin
is worth more us dollars
then both assets are going to appreciate
in relation to fiat
so there's a lot of a lot of moving
parts when you trade or invest in crypto
but it's quite interesting it's quite
fun you've got a lot of data to work on
uh one of which is volume you don't have
a lot of volume to work with on
forex pairs because the volume is only
provided from your broker whereas the
crypto market
you can check across the total market so
if we look at
total alt coins the total altcoin
valuation is 343 billion right now
volume is strong it's a good sign for
this trend
and i'm excited to see what happens to
godanno in the weeks to come be great to
see a short-term sell-off
and pick up a nice discount here at 34
cents but it'd be even better to see
this just skyrocket onwards
and i'd love to be wrong on this market
because the next stop
on this market is i think around 50
cents
so that's it for today's market analysis
i'm going to try and keep these
as short as possible i want them to be
concise
but before i let you go let's have a
look at the economic calendar for the
week
last week we only had like one i think
one or two
events this week is a lot busier but not
until later in the week
so nothing really stands out to me here
except for the
canadian interest rate decision
um probably not going to be a major
event
i don't think that they'll be changing
their interest rates anytime soon
australian unemployment could move the
aussie dollar a bit
apart from that nothing super important
on this
list and given the situation i don't
think any radical changes are going to
be expected
in terms of financial decisions or
outlook
and so i'm expecting the next couple of
weeks to be just more of the same
especially in the forex markets i don't
think we're going to see
massive moves in the weeks to come
it's still early in the year and it's
probably a lot of bigger traders still
on holiday
so um yeah it's going to be a quiet
start of the year i think
this is a time that i'm taking to not
trade too actively i'm more focused on
preparing for the year ahead
back testing optimizing my portfolio for
the year ahead
and yeah i'm going to continue doing
that i've got the mentorship program
panscript mentorship program releasing
on thursday so that's going to keep me
busy
in the weeks to come so if you're
interested in that head over to
pinescriptmastery.com on thursday
and that will be available to enroll in
there'll be a lot more information about
it over there if you're not if you're on
my mailing list then
you will have received an email from me
explaining what to expect
if you're not on my mailing list what
are you doing you need to get on there
check the video description for a link
to get on there
and that's it for this week thanks for
watching good luck with your trading
thanks for being a part of this art of
trading family i'm
really grateful to have you here and you
guys are awesome
this is so much fun i'm really enjoying
growing this youtube channel
and sharing my knowledge with you guys
so
that's it for today's video i will see
you in the next one take care
[Music]
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