The good NVDA results last Wednesday offered some relief on cryptos and the Nasdaq index, although it was brief and the prospect of a USA/Israel military intervention in Iran dominated the price action. BTC made a decent run when it reclaimed the critical $65k level, while gold and silver had nice, anticipated moves up. Now, everybody attempts to assess the Iran operation state and position accordingly for/during the next week. Let’s analyse markets, one at a time.

In the last report, I wrote:

Indeed, the BTC price action offered the long trade on the SFP of the $65,065 level, but the bounce failed at $69,989 on 25/02. It still trades within the $65k-$72k mini range with two deviations to the downside. Technically nothing has changed from the previous week. The important levels to the downside are:

To the upside, they are:

So, technically the playbook should be to monitor the downside levels for potential SFPs to trigger long trades if the prices goes first down with targets the upside levels. Reversely, if the price goes up first, to monitor the upside levels for potential SFPs to trigger short trades with targets the downside levels.

On the non technical front, I would like to comment that the 25/02 BTC bounce of +6.13% look too fake to me. First it took place 2-3 days before the anticipated Iran/Israel strike on Iran. Second, it was based on a retarded theory, that blamed the bear market on Jane Street manipulation and expected the bear market end now that they have been supposedly forced to stop the manipulation. The conspiracy theory is summarised in the following twit that went viral.

The author does not understand how spot based ETFs work. Jane Street, as a spot based ETF market maker, has to settle trades of the previous day, every day at the CME open. Normally, they maintain delta neutral positions by using derivatives. At the next day’s open they have to close their positions. This means that they have to close both legs of their position, one of them being spot, the other being derivatives (futures and options). Since the two legs are on different markets (closely correlated, but different), closing the two legs simultaneously causes imbalances that soon disappear by arbitrageurs. Since ETFs have outflows during the last months, the volatility is to the downside and it is always at 10:00 am, because CME opens at this time. The fact that this twit went viral proves the retardedness of the crypto market.

The same day (25/02) various alt coins printed huge green candles. For example DOT closed +34% up. Think of it, an alt coin that is dead since 2021, made a daily +34% move 2-3 days before the anticipated US/Isreal strike on Iran and while BTC is in its deep bear market phase.

Similarly, I do not trust the current bounce that started yesterday morning at $62,972. The market run on what was first a rumour and then a fact that Khamenei was killed. Maybe, many think that the Iran situation is about to be resolved, with the regime falling after Khamenei’s death. I don’t believe this. This will be a difficult task and will take much longer to be achieved. There is a sentiment on financial and crypto twitter that it’s all over and markets, traditional and cryptos alike, are going to print huge green candles on Monday. I don’t know if this will happen or not. But, if it does, it will be a huge short opportunity.

Of course, the above is my non technical, personal reading of the markets current positioning contrasted to my reading of the geopolitical situation. Those of you who want to trade based solely on technicals, should remain non biased and wait to react on the levels described above.

For those of you looking at low time frames, I observed that swing highs and lows played very well throughout this volatile week. This is probably an indication there is none left buying or selling spot, but the whole market is driven by low timeframe perps traders at the moment.

In the last report I wrote:

Indeed, the first target of $5,285 was reached offering a very easy +4% long trade. Based on gold’s “safe heaven” status and my assessment that the Iran situation is anything but resolved, I have taken the decision to keep my long open. I believe we will see higher prices next week. I retain my bias that we will not see a new ATH soon and I do observe tiredness on the chart, as well as a potential ascending wedge forming. If it wasn’t for the Iran situation, I would have closed my long, but I decided to leave it open to run a bit higher.

In the last report, I wrote:

Indeed, silver offered a nice +13% move. I closed my long position on Friday, as I do not know how the Iran situation would affect it. Gold has the “safe heaven” status, silver not. In addition, I wanted to secure some profits, given that I left my gold long open. Technically, as long as silver remains above $92.015, I would expect it to move higher to the $106.610 level. If silver was to lose $92.015 and then reclaim it, I would be tempted to re-long it to $106.610. Then, I would see the $106-$121 range as a potential rejection zone.

I am still in the long trade I mentioned in the last two reports. On Monday the price gaped up but was rejected intraday as the cold weather did not sustain. I decided to leave my long open for two reasons. First, a new, colder weather wave is anticipated in March and I expected that the situation in Iran would pump natural gas price, besides oil. I expect a stronger and more sustained gap up with the open of the Futures market in a few hours. Of course, It helped that longs are still paid overnight swap fees, although less than in the previous week, I have collected in total 7.6% of my position value in overnight swap fees so far. My anticipation is that I will have closed this trade by the end of next week.

No change from the last report. I retain my bullish USD bias and monitor EUR, CAD and more cautiously AUD for potential short entries. If the situation in Iran takes long to be resolved, I would expect USD to strengthen as a risk off trade.

This Wednesday (25/02) Nasdaq managed to bounce in anticipation of good NVDA quarterly earnings report. The results were good indeed, but the NVDA stock (and therefore the whole Nasdaq index) was sold immediately when the report was published. The next two days the whole move was given back. There is a very optimistic sentiment on twitter that the Khamenei death means the operation in Iran is close to a successful resolution and people talk about gaps up and big green candles. I do not share this optimism for the Iran operation, so if they want to move Nasdaq significantly higher, I would see this as a short opportunity at the daily close, although I will prefer to play this with cryptos, rather than with stock indices.