 Alright, welcome everybody. Today is January 3rd, 2024. Happy New Year. We got some news out today, fake news, real news, who knows. But we got some good volatility that's going on. I'm going to talk a little bit about Bitcoin today and what's happening in the market. If we have time, I'll get into some Ethereum as well. Before I get into it, I want to go through a disclosure. You know, everything that we're presenting here is for educational purposes only and should not be considered specific investment advice nor recommendations. Cryptocurrencies, futures, options, forex, and stock trading contain substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. So if you don't have capital to risk, you're going to make bad decisions and you're going to make it more emotional decisions. And even if you have capital at risk, you're going to make emotional decisions and that's what our fact-based tools help to balance out. I'm John Salazos from Dharma Capital Trading. I'm a veteran crypto trader. I've been trading crypto since 2013 and trading futures markets since the late 1980s on the floor of the Chicago Mercantile Exchange. So I've kind of gone through the whole transition from trading with someone standing next to you to trading on the screen and then through the launch of different products and different asset classes from the start of the S&P and to the Merc picking up the cryptocurrencies and the market that's starting to blossom today and why we're here. You can visit us on the website at DharmaCapital.trade. I'm also on X posting, DharmaCap Trading, got a YouTube channel and we also have a substack where we're publishing a weekly overview on Bitcoin. So what we do is we're a proprietary trading and research company and we're all about fact-based trading and developing traders. The fact-based trading involves making decisions based on objective data analysis and to reduce speculation and subjective biases. And the resources that we use are our analytics to help standardize the decision process and your decision matrix. Our applications help to normalize those analytics into your workflow and we have our development programs help you to optimize your tactics. Our method is the same every day, any time frame. First we're identifying the context that defined the state characteristics. So what's the environment? What's happening in the environment? What is that context? What's the expectation of that context? And then we look for the structure that aligns that context. So where does that context change? When do we get into a situation where the context is changing? And those are our structure points. And when we identify these structure points we have an expectation. If then statement, what is more likely to occur? And that's what we're always looking to be on the side of. What's more likely to occur? Not a feeling, but facts. What are the facts? And that's what our method does. We incorporate a statistical outside view which helps to slow down the decision making process to minimize biases. And this is best said from Daniel Kahneman from his book Thinking Fast and Slow, the outside view offers a more accurate predictions than the inside view. And so what he's saying here is that our statistical, our thought process that we do to make decisions helps us to really slow down on a problem. Typically people live their life making decisions intuitively. And most of the time that works out. But in trading it can be harmful. And definitely you've got these different cognitive biases that can influence you. As we mentioned on disclosure, if you're short on risk capital those emotions are going to creep in there and they're going to make you panic more and when you're making those intuitive decisions you're going to be hitting panic buttons left and right. Versus thinking through what are the facts say and be more emotionless in your decision making process. And that's what our method does. And what we look to do is we look to have a fact based solution. What's the truth? What's really happening here? And then from that we can make our best decisions. And so again to test drive anything that you see today you'll come to our website at Dharma Capital Trade you can register with us and then also sign up for a free trial with our services. So today I'm going to speak to you from kind of how I look at the market and how I invest and what I do and what I think most people that are in crypto do besides looking for the unicorns out there holding a core digital asset position looking for projects that really matter where are we going with Web 3.0? Building the foundations here. And that's what when you're looking to accumulate you believe in the space and that's why you're here or you're just a volatility junkie which we all are. But if you really believe that decentralization is coming and there's a place for it how long is it going to take? I don't know. When I was on the trading floor we traded in the pit and Globux came out in the late 80s and I was like oh electronic trading is going to take over the world and it took 10, 12 years for it to really take over. So how long is this transition going to happen? I don't know. It seems that it's inevitable. So if you're looking to hold an asset and you have a net long mandate and when you're trading having a mandate is so important it really takes the guesswork out. If you're long and that's your deal I'm a buyer. I'm a seller. So as a buyer what do I want to do? Well I want to buy low and I want to sell high. So I want to accumulate. It's one of my strategies. I want to accumulate on dips. I want to look for good places off a structure to accumulate more assets. What else do I want to do? Well when the market gets a little held itself and gives me some huge profits I want to lock them in. I want to reduce my profit give back. I don't want to give back any money. I hate giving back money. And these markets take it away so quick. What else are we concerned about? Well we're concerned about negative momentum shifts. When the market has a negative turn and we shift into a negative trend we want to protect ourselves from those shifts or grow to fiat. Get out of that asset. And also if we don't have the opportunity to buy a decent dip then we want to take advantage of leveraging our position with positive momentum shifts. So accumulate look into increase our position reduce our profit give back hedge negative momentum and leverage positive momentum shifts. Those are our basic strategies. And so what tactics can we use to capture those? Well we're going to break down three tactics three strategy themes here. Fading momentum. So this would be in this situation for fading positive momentum that would be a hedge tactic to reduce profit give back. We're going to trade with momentum on a breakout. So a shift in momentum through structure is going to give us a negative signal to potentially put on a hedge. And a reversal strategy. So typically when the market is in a corrective situation we don't want to step out and catch a falling knife we're going to let the market tell us when it's time to turn and we're going to look for those capitulation moves where we get this reversal signal. So really breaking down your tactics and aligning whatever you look at whatever strategies you look at you break them into these buckets. I'm either fading moves I'm trading with momentum or I'm looking for exhaustive reversals. And really you start to standardize your method. You standardize your process. We're going to take a look at a good example of profit give back protection and capitulation so we've got a lot of interesting things to look at. So let's break these down and we'll go to the live market and see how things played out today. So for accumulation what we do is we identify structure in the market. So we're going to identify upper structure and lower structure containment, upper containment levels. We call it a critical range. People have different terminologies. Ours is critical range other people may call them containment we're identifying the zone and then there's a midpoint of the zone and it's not necessarily a symmetrical midpoint but there's a midpoint that's kind of like the rotational area within that zone. So we identify a lower containment level, upper containment level where do we want to accumulate where do we want to protect our profits basically is what we're doing and then using the midpoint as a momentum shift so if we shift above this point that's going to give us an opportunity to the expectation of the market is going to follow through in that direction and conversely on the downside as well so keep it real simple really three main price points that you want to identify upper and lower containment and a pivotal midpoint. So in accumulation the entry strategy themes that we're going to incorporate are going to be fading momentum and momentum reversals so we're going to identify that containment point and we're going to fade momentum into it and we're going to look for exhaustive reversals as well so those are the two strategies and so these are the macro themes and then as we get into the order book and we take a look at book map we'll see how what's happening at the moment on these themes in book map we're going to look for for a fade we're going to look for a lot of resting paper and liquidity building up off structure and then also on the reversal we're going to look for big liquidity and people puking out of their positions and we're going to see that and then not following through so we're going to start to see that in the order book and we'll take a look at that see how that played out today profit give back is the flip side of that so we're identifying the upper containment area of the critical range the upside pivot and we're going to fade momentum into that level to protect our profits a lot of times having resting orders there in the market especially in crypto you get those big equity profit surges you want to lock some of that stuff in it's too late after the fact you get anything off and then the same thing with reversal signals and this is something that I highly recommend you do all the time when you're identifying that upper containment area when the market takes out those levels to really jam up your profit give back because if the market's that good it should just go and if it doesn't there's a problem and so that's our other strategy themes and negative momentum shifts we get a break through the midpoint of that what we call our critical range or the upper and lower containment as momentum shifts and it's rotating expectations going to play for the lower containment and if they can't hold that level it's going to signal a break out and so those are our two negative shifts themes that we're going to look to execute and then if the market starts to pick back up and we didn't get anything off on the lower containment areas we can jump on the market as it transitions above the directional or if you get a break out above the upper containment we can leverage up and execute a breakout strategy to the upside and so those are our net long mandates and so let's take a look at the let's get into the market now and see how some of these mandates played out today so we've had some big movement and I'm going to work off of my weekly structure and so I've used the notes to add this structure to the side of book map here and so we've had a let me see how much history I got let me go back much farther but we'll take a look at the chart and then we'll look at this this capitulation here so I'm using the the multi-book it's going to include multiple exchanges so it's not going to be identical to what's trading on the Binance Perpetual here but we'll get some insight to that so here is the upper containment and lower containment area for the week so this is weekly structure this is the directional area within that also including some of the presentations we also follow time frame structure which is here's the previous week high previous week low previous week close and previous week midpoint and so these are great general guidelines just to give you a sense I wouldn't call them containment areas and I'm not such a big fan of technical analysis support and resistance but I am a big fan of quantitative structure and so but this gives you some insight to the market's opening up starting the week it's starting out below the previous week's midpoint this is kind of like the momentum level and the market is trading within the previous week's midpoint and previous week's close we actually had the same situation happen here so it's giving us that it's trying to make a decision is it going to rotate down to the low part it's going to rotate up to the high part here when we started out in the new year because for crypto the week starts on Sunday so new year's eve the new week started and then with the new year we get our new year we get our new year move compared by the market's sustaining trading above the previous week's midpoint we take out the high and let's put on our containment areas and so here this is a situation where we want to accumulate at these levels here but the market opens up below that midpoint expectation to accumulate here and we don't get that opportunity the market digests and then here is a momentum shift and so we get this this breakout shift here we want in this situation we want to see liquidity like this kind of push up and we'd like to see some intensity of trade as well happening and that's what's going to give us insight and confidence of a move when the market bases above something like this so on a breakout when the market gives a false move to the downside false move to the upside holds this metric and all of a sudden it starts to build positive momentum, positive structure and that's what we're looking for when is the market going to start to potentially trend and that's what a breakout move is so here's a leverage opportunity as the market's coming up we're buyers, we're happy the market's going higher do we want to step in front of this momentum no, we want to do a reversal situation we're not going to step in front of a train absolutely if you have based on our work I'm going to add these additional levels if you have gone through some of our stuff before when we get a breakout move we're always looking for a two segment move so this would be a two segment move with something to fade into so that's the expectation we don't always get it we did get it this week so in this situation we're looking for if the market failed here and failed back down here that would be a reversal but here's a situation where a two segment move is a fade so we get a fade opportunity and then the market here breaks structure and gives us an additional sell to reduce profit give back on a sell reversal opportunity so reversal the market needs to go through a figure start below it, go through it and fail so here in our profit give back we had a two segment market stalled out here and actually let's see so we do have this we have this reversal signal here let me blow this up we also have what we call validation points so I'm just going to throw this on real quick so here we have the previous week's high so we're looking at the order book here as the market is coming off the highs here let's see where is this it's about right here so this is basically this area here this and so as the market is trading here we're not getting that much interest there's not the same we're not getting a lot of liquidity coming into this move here and then we I like to look at the VWAP as well and then all of a sudden we get a failure and so this is this is my validation point so if the market is really good I'm going to expect this thing should be basing above this point for a new move so it gives us a head fake here squeeze, can't get back down this is just kind of normal if the market attains a target it's going to go sideways or it's going to correct so this is actually firm correction action and then it's starting to build positive structure to do it and so we get a failure let me just put this in here so when the market is unable to maintain a trade above this what we call a critical range positive extreme and when you see the if you're following the trend the trend is going to hold this VWAP it's going to hold the VWAP and when you break that it's just a sign there's something that's a fact that's not in alignment with what you want to have happen so you need to take note of that and then here the market fails from starts trading below the CRX plus and it's negative and then we see this resting paper that's been here and you've got this alignment off the previous week's high that's this point here this resting paper this alignment you're looking for this this liquidity to match up with structure so when you see that then you know it gives you confidence in this structure here this is something in our in our sub-stack post we were talking about this price point so we were talking about this this 4400 this previous week's high point is really the key structure point then the market has to hold above and if it can't it's going to signal a break in the positive momentum and so we when we see this alignment here that gives us additional validation and so the market comes in and you also have liquidity on top of this metric band so you have liquidity up here so you still have interest coming in here to get long these guys want to get long and they want to buy this and here the market gives us you know basically just takes that out and so this was a this was a strong strong message to the market that there's a problem so the the moral of the story here is that we have this macro view we have we really want to protect as much of our profits as we can we know that a market when it makes a breakout move from the directional to APMD's two segment moves so it's coming up here we know we've got some news from the SEC coming out we know we've got a lot of people that just got excited at the start of the new year to get involved in bitcoin and this market should just stay linear this is just classic price structure it should just stay linear and it should just go and when it does this it tells us that there's a problem with this super aggressive buying so this was the first tell we don't have it here in bitmap but this was the first tell this told you that everything's in alignment market attained a target it should try to make a put play for this previous week it couldn't do it now it's holding structure here it should just go this is classic crypto this is I'm going higher and no I'm not and so this is what I was talking about earlier that when the market tells you yes I'm going higher here one in the order book you can see you're not getting the intensity of trade that's supporting it so that's another tell but when they give you this positive signal that's the trigger to adjust your profit give back that's the trigger to say I'm going to protect as much as I can because if this market you just go and should retest the highs if not make them move higher and so this is where you you need to protect yourself when you get those positive surges and you can see that in the order book as well when you get a positive surge you take out some liquidity and you're holding the view up it should just go and maintain that structure and when it doesn't that's a signal that there's potentially a problem and so here in the order book we can see and so here this is giving us good alignment that this is you know we've identified we know that the market moved outside this containment area attained a target if it's going to stay if it's going to remain super positive it's going to hold about previous weeks high and it doesn't immediately takes that away so let's just keep that's just follow this break so with this this is our reversal signal expectation is that is a 2A PMD move so this is our natural target for that reversal market also is all happening really quickly so this would be you know this is the tell was here that there's a problem and then the failure below the view up was also additional insight and then here the market did give us you know a slight a moment here after it broke structure to potentially you know get involved in part of the weakness here and you can see that you just had this whole stair stepping of liquidity but having the awareness with the bigger picture where you know what's the natural flow where can it go you're dialed into this area here and on the multi-book it's not as thin it's bigger so you didn't get this spike didn't show up but you had the market pressing into here let me dial back my number of coins here so from the start of the week what did we know we wanted to do we knew we wanted to accumulate here and so it's easy to get your emotions to get involved when the market's doing this and just think this is the move it's going to go and not execute any profit give back and just say I'm going to go for it the bigger problem is leveraging up here and not protecting your profits from the start of the week you wanted to buy it here so now we know the nice thing again you've got this resting paper in the order book here you had paper in front of the figure as well and so this is coming into alignment with the previous week's low point and you know so as a trader and looking at structure what's the previous week's low point well the market's been in a positive trend if it's going to trend higher it should hold the previous week's low point so we know sentiments below the market so we know that this is our containment point on the downside and the market gave us that opportunity but the fact that we made a new move low for the week dials back the positive expectation for bitcoin for the rest of the week so where are we at now and what's the opportunity I'm not sure why these aren't displaying for me well lost my dots but that's okay okay so here's so we had our profit we had our fade opportunity came in here we had a reversal signal come in here we had a press it signal come in here but we know that this is our accumulation so we had our accumulation fade and reversal trigger here so now we're right now we've accumulated the market broke out above the directional here blow this up just a little bit so you have I love seeing the resting paper in alignment with structure and I like seeing a lot of liquidity big big bubbles come into play and taking out this liquidity especially after such a big move to the downside so this is all good typically if you have a reaction off of one major level you're going to move to the next so it's like climbing the stairs so the expectation of getting involved here is the market's at least going to go here if not here if not this is the low point for the next extension higher because this is what sentiment is so what I thought was interesting this morning and I did a post we had the market basically just coiling within this zone between the 42,800 and 42,200 area just like we did at the start of the week and so this became this again became the key momentum area that we're dealing with and you can see here how we had a lot of buyers getting excited trying to press it through the top of this metric boundary and it couldn't do it and then we get a break out here and you have a lot of liquidity coming in and getting all excited at the what we call our critical range positive so this is kind of a validation point so currently the market has come off of sentiment at the directional the liquidity is below the market here so it's still it's down here at 42,000 strike so just below these structure low points so it's just kind of interesting another good thing why you need book map is it gives you this insight if you don't have book map you're looking at this and you're saying okay I'm going to put my stop here below this structure this classic structure but then when you see that there's some big bids there that's when you get those little head fakes so the market takes out the the structure low point but it comes right into some big liquidity patch I like to see when this structure is actually in alignment with market structure so it's a little bit out of alignment so that tells me it could be still a little wily and speaking more towards being a digestive trade than a smooth trend if the market you know in a smooth trend trade this liquidity is going to shift up and the market is going to maintain the integrity of this figure even though the market is going back and forth through it it really should stabilize above basically 42,400 so currently we're trading at the top of this metric boundary which is also the previous week's midpoint so right now we're all positive what's out of alignment is the VWAP right now what's the question the question is are we going to have a sideways digest here and maybe digest within these two zones and kind of start to tighten the coil into the economic figures that we got coming out on Friday or is this just a big squeeze to get out all the new people that wanted to get involved in Bitcoin because it did so well last year and they wanted to give them a reality check of what crypto is all about and are we going to base it and recapture this and end up settling up here and so that's the decision that's happening here and like I said the fact that this liquidity is lower is speaking to more of a digestive action and then if the liquidity starts to build up at the top of this metric boundary that's a problem what we really want to see is some kind of intensity of trade happening above here so basically above 42,800 we want to see an intensity of trade pick up and that would be a tell that we could see a rotation and if we do get a retest of this area and we see liquidity picking up then we would expect the market to make a play for this our original upper containment of the previous week's high point and you can see how the market's defending this area here which is telling us that we've got some decent sellers that are saying this market is more likely not going to take out the previous week high and what do we have going on on the weekly which is interesting is we have an outside bar so we have on basis of the week because we went above the previous week's high and we went below the previous week's low so the net change is going to be a big deal as we come into for next week how is this week going to end up and so really this zone here between 40 really the directional 42 461 is a key price point for where this market settles out of what's going to happen because if we do close below here and the week below here we have the potential to be especially close below here a little short term top situation so when you have the bigger picture when you have the macro structure is the micro structure behaving to that expectation that's what you're always looking for for me I'm primarily focused on the macro structure and I'm using the micro structure to validate it and everyone's got different styles I've never been a short quote unquote scalper even when I was in the trading pit to me a half APMD move is a scalp if you put a trade on you're putting capital at risk and just slippage alone it's too much to risk without getting paid out the other thing I'll mention on structure wise is knowing how much to bet so you're always betting the biggest bets off of sentiment next biggest bets are the containment areas and the next biggest bet and the directional and the small spets are on minor structure however you do your analytics you definitely want to have a size management tool some way to standardize your size not just I think I want to go big now so you want to have a size management tool to know that this is just an opportunity you know I just sometimes I'll trade super small just to be involved just to have my toes in so I get a better feel but putting on any kind of size you don't want to get into big size it's small areas and you want to have be able to identify here's where I can trade big because even if you're a buyer you're buying a decent size here it gives you money you're pressing it this is smaller size maybe you're pressing again even smaller size and looking for this thing just to go and it doesn't go so as you start to bail out you start to bail out it validates that this is all over now you're not thinking this is the only place you're thinking by and now you're putting on your big size and now you've accumulated you've added and you're sitting here is this thing going to pick up and go and if it trades back below 4200 it's not and what's the order book doing it's not really helping us right now so it's just telling us we're probably going to have to sweat it a little bit I want to see you guys any questions anyone know what the SEC verdict is going to be bottom line having some facts even just the time frame structure that I've gone over before just using that alone helped you as a tool to help to reduce profit give back you need to have some things that help to balance out your emotions and so the fact is, market goes above the previous weeks high it's positive it should start trending higher the fact is, if it can't hold that there's a problem with it and so in trading below the previous weekly low that's a problem and the fact that we couldn't stay below the previous days low we couldn't trend up to the upside we couldn't trend down to the upside we're back in the middle if you're looking at a close start it didn't do anything but a lot of people got blown out of their position people bought this breakout too maybe they sold it here so having some structure identifying your size management tools looking for having a mandate is key it makes trading so much easier for crypto, for me I have a net long mandate this is a major major cycle trend I don't know how many years it's going to last it's going to go through different variations but I do know I'm looking for valid places to accumulate when this market just pays out so fast actually I use that as a trigger myself when I get greedy and the market pays me out so quickly I'm like that's my first when I change my expectation I expect the market to go here then all of a sudden it goes there it goes there fast and it goes through it and maybe you just turned away from the screen then all of a sudden it did that then all of a sudden your expectation changes and you say oh it's going to go even higher it's going to this area whenever I get those feelings it's always a trigger to adjust my profit give back you just check that out whenever you get super greedy and you get all euphoric and you say oh the moment you have that feeling adjust your profit give back really quick because that's how quick it can happen the moment that you get what happens in the marketplace is a lot of people that weren't in are buying it then they're clicking it that's the last they're like oh it's going to go and they get in and as soon as those people get in then the market just turns and takes it all away and you see that happen all the time in crypto and so that's a great emotional trigger when you get that big greed factor coming to play that it really tightens things up and on negative momentum shifts in the marketplace you know where are those momentum shifts occurring and are they is this something just a short term corrective piece or are we having a shift below a major containment area that's to differentiate that and you wanted to as the market turns on those situations definitely as soon as you get those breaks in momentum start to start to protect yourself and the first ones are always the best ones but in any kind of a hedge it should just go and then you flip the reduced profit give back to getting out of that hedge and as soon as it really starts to take things out you aggressively adjust that your stops on the hedge to take it off and leverage position positive momentum shifts though any kind of momentum trade any kind of breakout situation use your classic price structure the market should just hold it's going to go higher it's holding the positive price structure it should just go and the first time if it doesn't and it starts to slow down and you break that price structure that's a tell it's not the perfect one and you need to be careful but absolutely going into trading having a mandate I want to be a buyer I want to be a seller and then using these basic strategies themes around that it makes you're searching for places to accumulate you're more aggressive to reduce that profit give back you're identifying areas where you're going to see negative momentum shifts to participate and you're like if I don't get my accumulation I definitely want to get involved if it gets through this point it's like you have a job then and you're not it's not emotional and especially if you have tools that we offer that providing you a more statistical backbone foundation to work with it really changes the whole dynamic of your of your thought process how you deal with it I was just going to wrap it up but we're getting a little so that's what I was saying that the fact that we couldn't get that liquidity to push up made it vulnerable to that move and that's the classic situation that's happening you know right here real time and the fact that it did this and did this told you it's going to be messy and so with book map this is why you buy a book why you subscribe to book map is it this paper has been resting there for a while and it may come back and eat more of it up and take it out who knows but you knew that was a bad stop when I see stuff like this I typically want to have my stops even tighter I like to see when liquidity and structure align and when they don't I'd rather get out sooner with the expectation that they're probably going to go there and squeeze everybody again this is you know as we tee up and we're coming into the end of the week and what's happening we have we have a pretty key reversal situation going on here on basis of weekly and you know if they they're trading below the previous week's close it's a problem so this zone is going to hold out through the week fun times for crypto traders we've got good volatility it's really nice so you know feel free to contact me directly if you want you can DM me in the on the discord channel or email me at info at dharmacapital.trade again come to our site check out our stuff get on trial we use a trading package called seer of charts as well and you combine that with bookmap and it's really a powerful weapon you know just to be able to see the macro structure and then dive into the micro structure you have all the facts in front of you and it really gives you some great clarity so I wish everyone happy new year and good health and prosperity in these markets stay focused and enjoy your day see you next week cheers