Start

Congrats!
This is the first step in your journey to financial freedom.

Turning 3 figures into 5 figures in a short time? Or 4 figures into 6, or even more?
Only with crypto! Crypto is the financial opportunity of the century and an awesome
community. But it's not easy either - otherwise, everyone would be rich!

In this course, we'll lay the foundation for a deep understanding of

● money
● investing
● psychology
● the crypto market
● analyzing charts and projects

At the beginning, there's the realization that the only variable you can change is
yourself. That's why I like this quote so much: The summit is not just a destination;
it's a state of mind. And that's really good news because that's something you have
in your own hands, something you can achieve!

You've got to really want it. You need to go through good times and bad; endure
failures and get back up. Then, eventually, you'll reach your very own personal
summit.

This course is here to help you with that; it's your starting point. Now, leave your
comfort zone and let's go!

The Summit Circle

Here's the link to join the Telegram channel: The Summit Circle.

Please send me the invoice and your TG handle on Twitter and I will add you!
1
Important note: This channel is the first group of people I tell about my
purchases/sales. But just because I buy something, it doesn’t mean it’s suitable for
your portfolio! Always consider risk management (especially position size) and it’s
better to skip an investment or trade if you’re not sure!

Additionally, I sometimes write quite briefly. If you’re not familiar with abbreviations or
expressions, please Google them and if you still don’t understand, make sure to ask
me!

2
Action! (Video 1)

1% better
There's only one variable you can change: YOURSELF

And action!
Yeah, now you listened about crypto...

I know, you like to dive into this world, to read about it, to talk about it, and so on. I
like it too! Unfortunately, this is not what we need to be successful.

What we need above all is one thing: action.

Start with the lists below.

Let's go!

(Now.)
[Link]
Download
[Link]
Download
Assets_vs_Liabilities.pdf
Download

3
Accounts & Security

Accounts & Security

The most important basics

Unregulated Decentralization
Crypto is a nearly unregulated market, and it is mostly decentralized. That
has pros and cons!

For example, you don't have the possibility of reclaiming lost money from
an institution, and it is a playground for all kinds of scammers who are only
after one thing: your money!

Therefore, the absolute foundation of everything is the topic of security.

With a few tools and settings, you can catapult your security level to new
heights!

Let's go!

E-Mail
You need a secure e-mail address! Don't use the same address for work or
personal purposes. And most importantly, secure access to your emails
with a two-factor authentication (2FA) process to prevent SIM swaps.

For further research in this field, I recommend the following websites that
offer more security than the standard e-mail solutions like Google, etc.

● Proton E-Mail
● Nordpass Password Manager

Another additional security measure is the constant use of a VPN. This

helps to encrypt your internet connection, shielding your online activities
from cybercriminals. It also allows you to bypass geographic restrictions
and access content that may be blocked in your area.

4
And most importantly: never click any links in the replies or your DMs
unless you are 100% sure that you can trust them!

CEX Accounts
How to get your USD or EUR or whatever fiat money into the crypto
system? You need a so-called on-ramp. This is a platform where you can
use a bank transfer or credit card to buy crypto with your fiat money.
Usually we use centralized exchanges (CEXs) for this.

While a single CEX account is enough to get money into the system, the
situation can be different when you want to convert your crypto back to
fiat and withdraw it back to your bank account.

CEXs have daily withdrawal limits, sometimes withdrawals are blocked,

accounts can be frozen, and so on. It's crucial for off-ramping, that you have
multiple accounts at different CEXs, so that you have multiple "escape
routes" for your money at any time.

If you don't have accounts on CEXs yet, you can use the following affiliate
links. This way, you will receive various discounts and bonuses (depending
on the exchange) for signing up or making deposits, while the exchanges
will have to give me a portion of the fees through the affiliate link and
believe me, the exchanges are already making plenty of money...

5
 ● ByBit
● MEXC
● BingX
● BloFin

I recommend Bybit for futures trading with larger amounts, MEXC is

essential for small caps, BingX offers the best bonuses, and BloFin will
remain non-KYC at least for this bull run!

Tools & Socials

In your crypto journey, you primarily need one thing: information. For
analyzing charts and basic info on market cap, etc., you mainly get this
here:

● Trading View (Basic plan is enough)

● Coingecko (CG)
● Coinmarketcap (CMC)
● Dexscreener oder Dextools

Create an account on each of these platforms. Additionally, you'll need

accounts on social media sites, as every crypto project uses these channels
as official means of communication for updates or to engage with their
community:

● Twitter
● Discord
● Telegram

Ok, you've got a bit of work ahead of you! Before you proceed, start by
creating all those accounts - ideally using a new, secure email address.

Don't put it off for too long - do it now!

6
Blockchain Basics

Blockchain Basics
Magic internet money: Coins & Tokens

Blockchain Basics
You probably already have a rough idea of what a blockchain is. If you're
completely clueless, or you want to refresh your knowledge, I recommend
this YouTube video.

To make money with crypto, you certainly don't need to be a tech expert,
but a basic understanding is important. This story illustrates why:

It was one of those presales that everyone was especially hyped about -
this time on the Base network. We didn't know when the presale would
start, how it would work, or when the launch would be. (You know it's a bull
market when thousands of nerds are glued to their computers, ready to
pump their last savings into a project they know less than nothing about.)

Then finally the message we waited for: the presale was starting! My phone
rang, a friend asking, "How do I get money onto Base?" "You have to bridge
from Ethereum to Base." "Aha. OK, how?" "You can use Rango." Send him
the link.

Minutes later, "Dude, is this normal? It's taking so long." He sends this
screenshot.

7
"Shit, what have you done? Just from ETH to Base!" Because now his
money was stuck on AVAX, in a wallet without any AVAX to pay for further
fees. It wasn't a disaster, and he was able to retrieve his money later, but
that didn't help him at the moment - so he had to try again to have the
funds for the presale.

And here’s the kicker: he made the transaction the exact same way again -
and the money was stuck on AVAX again! If you're laughing now because
you understand the principle, you can skip and go to the section on
wallets. But if you're not quite sure what all this means, here are some
essential blockchain basics.

Coins vs. Tokens

Even though crypto might seem similar to stocks - like you just need an
account, buy a crypto project through an exchange, and now it's in your
account and it’s all the same - this is far from the truth!

A crucial distinction we need to clarify first is between coins and tokens. A

coin operates on its own independent network, such as a blockchain, DAG,
RAG, or other fancy technologies, and it stands completely separate from
other cryptocurrencies, sharing some characteristics but differing
significantly in others.

Examples of coins with their own chains include Bitcoin, Ethereum, Kaspa,
Qubic, Tao, and many others, each with its own consensus mechanism and
technology. And of course you can't just send Bitcoin to the Ethereum
network or vice versa as they are independent networks that don’t interact
directly!

8
However, it is possible to convert Bitcoin into an ERC20 token, known as
Wrapped Bitcoin, which allows the value of Bitcoin to be utilized on the
Ethereum blockchain. But it's important to note that this Wrapped Bitcoin
is no longer a "real" Bitcoin - it is a token now, not a coin.

So, what exactly is a token? A token does not have its own blockchain. Instead, it
operates on an existing blockchain infrastructure. You can create a crypto project, an
app, a meme coin, or virtually anything, but you don't necessarily need an own chain
for it. Of course, when you build your project on a specific network, you are also
committing to the various token standards, as well as all the strengths and
weaknesses of that network.

It was Ethereum's major innovation to support smart contracts, which allows apps
and various other functions to run on the Ethereum blockchain. Therefore, the most
well-known standard is ERC20, the most important token standard on Ethereum.

When you’re in your CEX app and navigate to the withdrawal section, check under
which networks you can withdraw USDT. Each option represents USDT as a token on
a different blockchain, with ERC20 for Ethereum, BEP20 for Binance Smart Chain,
etc., highlighting the flexibility and inter-operability of tokens across different
blockchains.

9
While you can send funds from your CEX and the fees are automatically
deducted from the amount you're transferring, the situation is quite
different with on-chain transactions and this is really important: every
network requires fees for transactions.

No matter what type of transaction you want to perform on Ethereum,

whether it's a swap, sending funds, using a bridge, or minting an NFT, you
need to pay for that transaction using the network's native currency ETH.
The same principle applies to other networks such as Solana, where you
would need SOL in your wallet, and for AVAX, you need AVAX in your wallet.

So if you send a token to a wallet without an AVAX balance like my friend

did, it will just sit there stuck.

If my friend had known that, he wouldn't have encountered his dilemma.

While the detour via AVAX was the cheapest overall route, it was just one of
several suggestions offered by the app. Simply bridging from Ethereum to
Base would have been an option as well... So when making transactions,
always keep these basics in mind and pay attention to multiple options!

10
For investing, this fundamental understanding is the most important
aspect of Blockchain Technology - more about this topic later!

Wallets

Wallets
Not your keys, not your coins!

Wallets
After what we've discussed about coins and tokens, one more thing
becomes clear: If a team develops a completely new technology that
operates differently from previous projects, integrating this chain into

11
existing wallets isn't straightforward. This is also why it can sometimes take
a long time for a new chain to be listed on a CEX; if the technical
integration is complex, it might require weeks of preparation.

In contrast, a token can be quickly integrated because it runs on an already existing

and integrated chain, such as Ethereum. This is also why popular wallets like
MetaMask or Ledger may immediately support some new projects but not others.
Tokens can be integrated instantly, whereas the integration of coins can take months
or might require their own unique wallet solution forever.

To secure your portfolio, it’s essential to thoroughly research the projects

you're interested in buying. Is it a token that can easily be stored in
MetaMask or Ledger, or is it a completely new technology that requires its
own unique wallet? The best source for researching this is mostly the
Discord server of the project.

You are your own bank

"Not your keys, not your coins" - this mantra of self-custody crypto users should be
taken very seriously. A lot can happen on a centralized exchange. It can go bankrupt,
freeze your account or funds, temporarily disable withdrawals, and more. Therefore,
it is crucial to transfer any substantial amount from exchanges to a personal wallet
immediately, even if you end up with ten different wallets. Get used to it - no one said
being your own bank was easy! Rather, conclude that it's wise to be selective when
shopping. It's better to invest in fewer projects, but with conviction and size, and then
take good care of them. More on strategy later.

Cold Wallets

Let's first talk about the fundamental principle of wallets. For securely storing larger
sums long-term, you definitely need a cold wallet. With a cold wallet, the private key
you need for transactions is stored on a separate device. Since this device is only
connected to your wallet when you actively use it, no transactions can occur at other
times. This is why it's termed "cold". It greatly reduces the risk of hostile attacks.

The most well-known providers are Ledger and Trezor, but there are many others out
there. I personally still use my old Ledger, even though it sometimes gets bad press.
Just do your research and buy what seems best to you. In my opinion, you can't go
too wrong - as long as you have a cold wallet at all!

12
Hot Wallets
In contrast to cold wallets, there are also "hot" wallets. These are wallets you
can use directly on your computer or smartphone. The private keys are
stored right on the device, hence the term "hot", because this makes them
much more vulnerable to hackers.

However, these wallets are quicker and more convenient to use since you
don't need a separate device. For fast swaps or trades with less substantial
sums, hot wallets are a good solution. The most common solution is
MetaMask. A very good alternative is Rabby Wallet.

From hot wallets, you actually need at least two accounts. One for secure
transactions like swaps on Uniswap and for long-term storage of cryptos
that your cold wallet does not support. And another one for risky activities,
also known as "burner wallet." This you can use when connecting with
apps that you are unfamiliar with and that could potentially be a scam,
such as mints, airdrops, presales, and so forth.

This way you'll end up with at least three wallets:

● Cold wallet
● Hot wallet
● Burner wallet

And when you buy into a new project with a new technology, you might
also need a unique separate wallet just for that. That's just how it goes
when you're your own bank!

13
One last trick to enhance security in your hot wallet: you can integrate a
cold wallet! For instance, you can set up an account in your MetaMask and
then connect it to a Ledger. Transactions can only be executed when the
Ledger is connected - this makes the process a bit more cumbersome but
adds an extra layer of security! Just google how to do it, it's really easy to set
up.

Securing the Seedphrase

Finally, I'd like to show you a great system for securing your seed phrase, which is the
key to your wallet. If your Ledger or computer is stolen or destroyed in a fire, you can
use the seed phrase to restore your wallet. This sequence of words is the key to your
wallet, and that’s all you need to have full access to your funds.

You must never share your seed phrase and never store it digitally, as it would allow
any hacker easy access to your wallet!

So, how should you best store your seed phrase?

1. Divide the words (usually 12, but it can vary slightly between wallets)
into three equal parts: A, B, and C.
2. Prepare three envelopes or three different notebooks (with pen &
paper, not digital)

14
 3. Distribute the seed phrase as follows: A+B, A+C, and B+C. This way, a
single envelope or notebook does not contain the complete seed
phrase, but only a specific part. You always need two notebooks to
have the complete seed phrase.

This way, a single envelope or notebook does not contain the complete seed phrase,
but only a specific part. You always need two parts to have the complete seed
phrase.

Distribute these notebooks in three secure places: a safe at home, a bank safety
deposit box, and another secure location. If one location is burned down or robbed,
it’s not a problem, as you still have access to the complete seed phrase. And if
someone steals a notebook, it’s no big deal, as they can’t do anything with just one
part of it!

Recover multiple accounts

By the way, if you've ever wondered how multiple accounts in your
MetaMask are restored using a seed phrase, read this: Within a wallet, you
can create multiple accounts, each with its own address. However, these
addresses are all derivatives of the seed phrase and are thus restored with
the seed phrase in the event of loss. To do this, simply enter the words of
your seed phrase, and you'll have access to the first account. Then click on
"add account," and the next account will be added. If you originally had 5
accounts, after restoring, you just need to add four more accounts, and you
will have full access to all your accounts again.

Trading Basics 1

Trading Basics 1
Orders & Price

Funding vs. Trading Account

15
On most crypto exchanges, you have several accounts within your main
account, and your fiat money initially lands in the funding account. Before
you can start trading, you need to convert fiat into USDT and then transfer
it to your trading account. Now you can decide whether you want to trade
a futures product (if you're not sure which one, use perps / perpetuals) or
trade on the spot market.

To really understand the respective orders, let's take a closer look at how
the price is actually formed in this chapter!

You should review the functions offered by the crypto exchange you use in
a separate tutorial, on YouTube for example. If you have any questions, feel
free to reach out anytime on Twitter!

Limit vs. market order

There are two types of participants in the markets:
1. Aggressive participants buy or sell at the current market price
(market order)
2. Passive participants wait for the price to reach a level they desire
(limit order)

Limit orders are crucial for the functioning of the market, because without
them, there would be no opposite side of a trade. A limit buy order is called
"bid" and a limit sell order "ask".
If there are no more limit orders at the current price, the next market buy
order triggers a more expensive limit sell order - the price is rising.

Let's have a look at an example. Suppose the current price of XYZ is $100. If
Sarah wants to buy $80 and places a limit buy order at $98, this is visible to
all traders in the orderbook. Just like Sarah, there are others interested at
different levels: Bob wants to buy at $95 for $40, and Alice at $92 for $20.

Here's the buy side of the orderbook:

$100 → Current Price
$98 → $80
$95 → $40
$92 → $20

Similar to buy orders (bids), there are sell orders (asks). Let's add some
sellers to have a full order book:

16
$110.00 → $90
$105.00 → $70
$102.00 → $150
$100.00 → Current Price
$98.00 → $80
$95.00 → $40
$92.00 → $20

Remember: If there are no more limit sell orders at the current price, then
the next market buy order triggers a more expensive order.

Now, a market buy order for $150 would get filled at the best price, wich is
$102 in our orderbook - the price is rising:

$110.00 → $90
$105.00 → $70
$102.00 → Current Price
$98.00 → $80
$95.00 → $40
$92.00 → $20

Of course, the order book of an exchange is much more complex, but the
principle is the same.

Which type of order should you choose?

17
Well, that depends entirely on the purpose. If you want to accumulate a
position, then limit orders are great because you can simply enter your
desired price. For example, if you are expecting a correction, and your wish
comes true, your order will be automatically filled. However, this type of
order generally has higher fees. This, of course, depends on the exchange
and the trading volume/VIP level, but typically, market orders have lower
fees, which is why they can be very useful for day trading when you are
already sitting in front of the screen and waiting for the right moment.

Over time, you will figure out for yourself when you want to use which type
of order, as this is also a matter of personal preference. By the way, we will
discuss the special form of the stop loss later in the chapter Trading 2!

DEXs & Bots

DEXs & Bots

Become an on-chain wizard

DEXs
Once you've brought fiat currency into the crypto system and transferred
your funds to a private wallet, you can proceed to handle everything else
on-chain, anonymously and decentralized, without ever needing to use a
centralized exchange again.

In practice, however, you'll still need CEXs because many worthwhile

projects are launched here, especially if they have their own chain and
cannot launch on standard DEXs like Uniswap, etc.

18
But the vast majority of crypto projects, not to mention meme coins, are
first launched on a DEX before being listed on a CEX later. Therefore,
handling DEXs securely is crucial; this is where the real crypto magic
happens!

DEXs are decentralized applications (dApps). To use them, you simply

connect your wallet and you're good to go! And that brings us to the an
important point: whenever you connect your wallet to an app, you're
exposed to potential attacks.

How to never use a scam link:

● Only use links from the official Twitter / Discord / Telegram accounts
● Bookmark the websites and use the bookmarks (don't google DEXs!)
● Never click any link in your DMs or in the Twitter reply section - at
least double check it's the right username behind the @!

Here's an example of how much effort scammers put in. Pay close
attention to the exact names of the accounts. At first glance, they look the
same. But look again: the name is the same but the account name is not!
By the way, this also applies to my Twitter account; there are so many
impersonators out there targeting you, it's really crazy!

It should be clear by now, that each chain has its own dApps. Here's a list of
the most important exchanges - get the links from their official Twitter
profiles!

19
 ● Ethereum, Polygon, Base: Uniswap
● Ethereum: CoW Swap
● Solana: Raydium & Jupiter
● BSC: Panecakeswap
● Avalanche: Trader Joe

How to know it's the official profile and not a scam? A very high number of
followers (Uniswap has over a million) and the yellow checkmark (for
organizations, costing several thousand dollars per month) are good
indicators. But even with that, you could still be scammed because there
are fraudsters who even spend that much money and achieve high
follower counts using bots just to scam you.

For me, the most important indicator is that my network follows this
account. For example, Uniswap: followed by over 100 people I follow. This
can't be a scam account.

20
Furthermore, there are always new DeFi protocols that serve multiple
chains or access multiple DEXs like Uniswap and compare prices, etc.

For example, I like to use Rango Exchange because it supports over 50

chains and you can also bridge here. You need a bridge when you want to
transfer on-chain assets from one network to another. So, if you have funds
on Ethereum but want to buy something on Solana, you basically have two
options. You can either send your funds to a centralized exchange (CEX)
and then transfer them to the other chain, or you can use a bridge.

Always remember that for on-chain activities of any kind, you need the
native token to pay the fees. Additionally, projects are always traded
against this currency. For example, if you want to buy a new project on
Uniswap on Ethereum, you pay with ETH, not USDT, unlike on a CEX.

How to swap
The actual process of buying is called "swap" on a DEX, because there is a
liquidity pool containing both currencies of the trading pair. If the trading
pair XYZ/ETH has a liquidity of $100k, then the pool contains XYZ and ETH
each worth $50k. So if you would buy $5k worth of XYZ, the price would rise
10% - quite different than the orderbook system of the CEXs with limit and
market orders. You can see all these informations on Dexscreener or
Dextools.

To swap a token, you need to use a DEX. In the example below with PEPE,
you can see in the top right corner that this token is available on Uniswap.
Above that, you see the trading pair PEPE / WETH. When you click on PEPE
in this pair, you copy the token address. You can then paste this address
into Uniswap and swap it for Ethereum. This way, you'll have the right PEPE
- never search in Uniswap or you'll probably buy one of the gazillion scams!

We'll come back to this is the chapter about shitcoins.

21
Bots
Most people probably manage their wallets from their computer. But what
if we want to get a call while on the go and quickly ape a project? For that,
I want to introduce you to a useful tool: Telegram bots.

Since you already have Telegram on your phone for your research, it's
always with you, making it super convenient. You can simply enter
everything into the Telegram bot, and it will buy or sell for you.

You can even set limit orders for DEXs, which typically don't offer this
feature because they use a liquidity pool instead of an order book. For this,
you pay slightly higher fees and, of course, face an additional security risk,
because Telegram can get hacked.

So, how do you proceed? You can just fund and use the default wallets in
the Telegram bot. Or create a separate account in your MetaMask, and use
this as a burner account just for your Telegram bot. Then, you need to
insert the private key of this wallet into the Telegram bot, and you'll be able
to access your wallet from Telegram.

I’m using one of the most well-known: Unibot, available for ETH / BASE /
MATIC, as well as for SOL.

22
However, there are numerous others as well. If you're interested in the
topic, do some research and get informed!

The System (Video 2)

The System
"I don't want a nation of thinkers, I want a nation of workers."

Wake up!
Do you really believe that the politicians in your country have only the best
intentions for you? Do you really think that school and education are
designed for you to find your personal destiny or to ensure that you have
the largest possible participation in society, a big piece of the pie?

No. "I don't want a nation of thinkers, I want a nation of workers." This quote
is attributed to various politicians and like in no other sentence, it
concentrates the fact, that those who truly have the power don't want to
share with you. And why would they? The system works just fine for them.

23
The system is driven by one thing: greed. The fight for a piece of the pie
also takes place in the markets. If you want to get your share, you not only
have to understand the market, but you also have to understand the whole
system behind it. And once you've seen it, you suddenly see it everywhere.

Future Technology

Future Technology
Blockchain: inevitable

Adoption
In the preceding video, we looked very critically at the system. It is
important to always keep in mind that the real strings are being pulled
where we can't perceive.

But there's also a development happening in parallel that anyone who

wishes can see: blockchain technology will transform every aspect of
technology.

The fundamental idea behind cryptocurrencies or blockchain technology is

to create a secure, decentralized, and transparent form of data
management. Every transaction or activity is recorded in an immutable

24
data block (block) that is linked with other blocks to form a chain (-chain)
and is stored simultaneously on a variety of different computers
(decentralized and secure).

In the financial sector, the introduction of blockchain technology has led

to new approaches to transactions and investments. The ability to process
cross-border transactions quickly and inexpensively has the potential to
revolutionize global trade. At the same time, smart contracts, automated
contracts based on blockchain, enable the development of autonomous
business processes and contribute to efficiency enhancement.

In artificial intelligence, blockchain technology provides a solution to a

variety of problems including privacy concerns. Since the records in the
blockchain are immutable and access is controlled, companies can
securely and transparently access data for their AI applications.

In the logistics industry, blockchain technology enables seamless

traceability of products along the supply chain. This not only improves
efficiency and transparency but also strengthens consumer trust by
providing accurate information about the origin and journey of their
products.

The integration of blockchain into corporate networks and

communication improves the security of data transmissions and enables
more efficient processes.

In the education sector, blockchain solutions can ensure the authenticity

of degrees and certificates.

The arts and creative industries also benefit from blockchain. Artists can
digitally sign their works and manage their rights and royalties
automatically via smart contracts. This creates a fairer and more
transparent environment for artists and rights holders.

In the energy sector, blockchain technology enables the creation of smart

energy grids. Through the use of smart contracts, energy producers and
consumers can interact directly without relying on central intermediaries.
This promotes the use of renewable energy and the efficiency of the entire
energy ecosystem.

The food industry can utilize blockchain to improve food traceability.

Furthermore, blockchain technology drives the democratization of the

internet by returning control of personal data to users. Social networks and
platforms could transition to blockchain-based models where users have
control over their data and are rewarded for their participation.

25
Overall, these examples illustrate that blockchain technology not only
brings about change in the financial world but also serves as a
fundamental new technology that will revolutionize various industries. Its
decentralized nature, security aspects, and intelligent contract capabilities
open up a wide range of applications that will significantly influence our
way of living, working, and interacting in the years to come.

All attempts to estimate the size of these markets and the potential of the
new technology remain just that – attempts. But one thing is certain:
blockchain technology is the technology of the future, and as it has always
been with emerging technologies, those who recognize this early enough
and invest in the right projects will undoubtedly amass a fortune.

Cheers to that.

Market & History (Video 3)

Market & History

Imagine buying Bitcoin in 2008...
Let’s take a brief look at the eventful and exciting history of crypto!

The Bitcoin whitepaper alone contains so many interesting aspects that

are valuable for understanding crypto culture and the market.

In the end, your knowledge consists of many small puzzle pieces that
come together to form a big picture, enabling you to make good
investment decisions!

26
 [Link]
Download

Crypto Investments (Video 4)

Crypto investments
Hq-altcoins vs. shitcoins vs. trading futures
The crypto world is huge!

You can buy

● High caps for a bit more security
● Low caps with gigantic ROI prospects
● Garbagecoins hyped by influencers until they rug
● Futures

27
 ● High-quality projects
● Memecoins

The possibilities are varied and overwhelming. Let's shed some light on
this…

Money flow: Cycle

Rotation
Follow the money

Follow the money

If we want to realize gains, we need to buy & sell where the money is
flowing. So we have to find the projects or narratives where there's
momentum and buy pressure - or where it's likely to be soon. In this

28
chapter, we're talking about money flow and examining three phenomena
in detail:
● Cycle (bull/bear market)
● Altseason
● Narratives

Cycle
In the following chapter on technical analysis, we'll delve deeply into the
topic of trends. Short and medium-term trends are crucial for trading
futures. For long-term investors, long-term trends matter the most. In
short, the strategy is to buy low and to sell high.

A good rule of thumb is to start with futures or shitcoins only after

consistently achieving good gains in the spot market with solid coins. And
for long-term investments, the most important trends are the major
upswings from the bottom of the bear market to the top of the bull market
which spans 1-2 years.

The complete time from one bottom to another is also known as a cycle. So
far, they lasted approximately 4 years. The simple rule is to buy in the bear
market and sell in the bull market. However, most people do the opposite -

29
otherwise prices wouldn't rise in the bull market and fall in the bear market
(supply vs. demand)!

Why?

Because investing is deeply emotional, and the euphoria and greed that
arise in a bull market tempt people to buy, while the fear and uncertainty
in a bear market tempt them to sell. Everyone who once experienced a
major cycle top or bottom will understand greed and fear.

The following graphic is an all-time favorite of Crypto Twitter. Although it

was originally made for the stock market, the emotions that arise during
rising and falling prices are always the same. This cycle of highs and lows,
of greed and fear, will repeat itself over and over again - in one form or
another.

Of course, it's too simplistic to say we buy in the bear market, because that
can potentially be very long. It's best to buy after the bottom, when the
upswing is slowly beginning. That way, you're not catching a falling knife,
as the saying goes. Because in crypto, just because the price has fallen
60%, it doesn't mean it can't fall another 60%.

30
The optimal selling time is during the cycle top / altseason (more on that
later). However, you can also buy in the bull market itself, for example,
when the market undergoes a correction (buy the dip) and still take good
profits. But the major investments you're planning for your generational
wealth in the coming years and decades, those are made in the next bear
market when it's likely that the bottom is in. Then, you look for the future
generation of winning projects and start dollar-cost averaging with size.
That's your main task for the years to come!

The 4 stages of a market

This model provides a more detailed view than just bull and bear. It divides
market phases into 4 different stages. In wich of these stages the market is
will be one of the most important questions you will have to answer in your
analysis!

1. Accumulation stage

After a price decline, buyers step in to buy at cheap prices. When buying
and selling forces balance each other, the market reaches an
[Link] is the time to buy (preferably at range low).

Characteristics:
• Follows a downtrend
• Range-bound pattern with noticeable support and resistance areas
• The 200-day MA starts to flatten out
• Prices fluctuate around the 200-day MA

Note: being in an accumulation stage doesn't guarantee a breakout to

higher prices; it can also lead to another breakdown. If the market
successfully surpasses the resistance level, it signals a transition to the next
stage...

31
2. The advancing stage
The market cannot stay in a range indefinitely. Either buyers or sellers will
gain dominance. When the price breaks the resistance of the
accumulation stage, this is the beginning of an uptrend.

Characteristics:
• It follows a breakout from the resistance of the accumulation stage
• Higher highs and lows
• Prices remain above the 200-day MA
• The 200-day MA starts to trend upward

32
3. The distribution stage

After the market reaches a peak, sellers step in. When buyers and sellers
collide, the market reaches a state of equilibrium. During this phase, smart
investors strategically sell off their positions in anticipation of upcoming
price declines.

Characteristics:
• It emerges after an uptrend
• Range-bound pattern with noticeable support and resistance areas
• The 200-day MA starts to flatten out
• Prices fluctuate around the 200-day MA

Note, that being in the distribution stage doesn't guarantee a breakdown;

it can also lead to higher [Link], if the price falls below the
established support level, the market transitions into the final stage...

33
4. The declining stage

The market cannot stay in a range indefinitely. Now the sellers gain
dominance. The price breaks below the support, marking the beginning of
a downtrend.

Characteristics:
• After the price breaches the support level
• Lower highs and lows
• The price falls below the 200-day MA
• The 200-day MA starts pointing downward

34
In the past, the approximately four-year crypto cycle has been mainly associated with
the halving. During this event, the reward for Bitcoin miners is halved every four
years, reducing the increase in the Bitcoin supply over time. However, this year,
Bitcoin reached a new all-time high before the halving event, disrupting the usual
four-year cycle.

In fact, the correlation is mainly relevant with one factor: M2.

Global liquidity
There are several ways to determine the money supply: M1, M2, and M3. M2 counts
all the cash people have, both in hand and in their bank accounts. When there's more
M2, people have more money. This means, they're more likely to invest.

35
Just look at the strong correlation between Bitcoin and M2. Global liquidity is like the
first domino in a line; when it falls, everything else moves.

So, why does this important liquidity changes so dramatically? Policies can
increase/decrease the amount of money flowing through the economy. It's mainly
about what governments do, like changing interest rates or the government printing
more money.

In short, we can say that crypto thrives when the economy is doing well. In this way, it
is closely correlated with the stock market. With gold, it tends to be the opposite.

I believe that Bitcoin and crypto could eventually move more towards a
correlation to gold and be a digital gold in the future. So far, for most
investors, it's not a safe haven but a risk asset, and therefore, it behaves as
such.

And just as a little reminder: the economy doesn't necessarily do well when
the news is positive. Usually, it's quite the opposite: everyone screams
recession, and then comes an upturn. Everybody is euphoric, and then
comes the recession. That's why technical analysis is so important and
helpful. Charts don't lie.

And they are always faster than the news because before things become
public, they are already well-known amongst the most informed and thus
printed in the charts.

36
Altseason & Narratives

Altseason &
Narratives
The road to financial freedom

Every degen's wet dream

Nothing yields as much ROI in a short period of time and fuels the
fantasies of crypto nerds worldwide like one word: altseason. Generally
speaking, this is the moment when altcoins, on the whole, begin to
outperform Bitcoin. In the early stages of the cycle, it's quite natural for
Bitcoin to make the most gains, as it's the established asset and there are
only a few outperformers that manage to be stronger than Bitcoin in the
early stages of the bull market. And although our goal is to find these
projects in the bear market and then hold through the bull market, the
biggest bang comes during altseason when suddenly all altcoin charts go
parabolic.

The fact that all altcoins suddenly go parabolic is mainly due to two things:
new money flowing into the market and profits from Bitcoin and high caps

37
being reinvested into smaller projects. So in general, we're talking more
about the final phase of the bull market and max euphoria.

But there are also small altseasons in between that can yield big gains.
Often we see strong Bitcoin performance followed by strength in altcoins.
Or the entire market moves up or down simultaneously. A good charts to
express this is Bitcoin dominance - Bitcoin's % of the overall market cap of
all cryptocurrencies.

Let's take a look at the bull market of 2021. You can see how the biggest
movement in the chart (Total 2 = top 125 altcoins) comes at a time when
Bitcoin dominance (shown in orange here) is declining.

Two things to note here. Firstly, the chart itself should be approached with
caution, because it's not an asset with supply and demand and therefore
doesn't follow market psychology. However, considering this, we can still
draw some good insights. As we can see, the major downtrend in BTC.D,
which coincided with the altseason, occurred at a key point in the chart.

38
Secondly, the percentage share of Bitcoin is likely to decrease rather than
increase in the long run. The more crypto projects are adopted and achieve
and keep significant market caps, the more the dominance of Bitcoin is
likely to decline. I doubt we'll ever return to a situation where Bitcoin
makes up more than 70% of the total crypto market cap.

That being said, we are looking for a period where the following
characteristics come together:
● Advanced bull market (right before euphoria)
● Bitcoin dominance makes a clear top followed by a decline

This is the definitive signal to realize most or all gains once there are
parabolic charts. But maximizing profit starts earlier - by buying in the bear
market, when sentiment is at its worst and fear is at its highest! This is your
main job now: realize profits in the next altseason and reinvest 1-2 years
later in the bear market.

Narratives
We are seeing a rotation not only from Bitcoin into high caps and then low
caps but also between different narratives. Typically, there's always one
crypto sector pumping, at least in the bull market. You could theoretically
realize more gains by playing these narratives one by one and positioning

39
with the profits in a new narrative that is likely to pump next. However, this
requires one thing above all: experience in the market.

Most people will be best advised to build a portfolio during the bear
market that includes several and especially the main narratives. In this
cycle, these are, for example, AI, DePin, and RWA. But of course you can
play the short-term pumps of the narratives with a part of your portfolio.
But as said, you need some experience for this; it's all about knowing the
space, the news, media and psychology.

For example, if important events are imminent for Bitcoin (e.g. ETF
approval), then likely the entire Bitcoin ecosystem and all tokens related to
it will have a run at some point. The same applies to Ethereum. If there is a
significant upgrade there and the focus of Twitter is on it, then the entire
ecosystem will have a run sooner or later.

Additionally, gains from large projects of one narrative often spill over to
the small caps. For example, if the major AI coins have a significant pump,
the small coins will also pump later, as all those who missed the large
projects in the bear market are looking for new projects that are still so
small now that they can potentially deliver a 100x return. As soon as
everybody is talking about Ai coins, everybody buys Ai coins. This results in
pumping Ai coins and everybody is speaking even more about Ai coins,
buying even more Ai coins. You see were this is going? This is what you call
a bubble.

Once there's major profit taking, the attention goes to the next narrative.
Observe narratives. And if you spot a good opportunity because you think
this event could lead to such and such, then try it out with a small position.
This way, you gain the necessary experience in this short-term game.

Or you consider yourself a long-term investor and identify the most likely
important narratives during the bear market and invest in high conviction
projects, then simply stoically ignore all short-term price fluctuations and
sell during the altseason and peak euphoria. Your choice.

40
Basics (Video 5)

Analysis
Basics

41
Trading View Tutorial (Video 6)

Trading View
This is where the magic happens
TradingView is indispensable for thorough market analysis.

And that applies not only to futures trading. Even if you're a long-term
investor, you need to analyze prices and find entries and exits, because you
usually don't buy and sell everything at once but rely on the strategy of
dollar-cost averaging - preferably depending on your own technical
analysis and not your favourite influencer's!

Analysis is the basis for long-term success in crypto.

With TradingView, you have access to charts of all markets, meaning that
in addition to crypto projects, you also have charts of stocks, indices,
commodities, etc. You can save your setups and analyses, set up alerts, and
much more.

Here's how!

42
Trends

Trends
There's one variable you can change: YOURSELF

Trends
Though it may seem so simple, this is one of the most important chapters.
This is where the most money is made and the most money is lost. So let's
go!

Every market has a trend: either up, down, or sideways. For futures trading,
up and down trends are particularly favorable, while for spot trading -
buying assets to sell them later at a higher price - only up trends are
suitable (of course).

We must differentiate three timeframes:

● Short term trend (hours / days)

● Mid term trend (weeks / month)
● Long term trend (> 6 month)

It's completely normal for the trend to move in different directions across
the three different timeframes. One of the main tasks in trading is to
determine the direction of each trend and not to confuse the different
levels.

Sometimes these contrasts appear in patterns that recur in similar ways,

such as a bull flag or pennant (more about these patterns soon!). In the
following example, we have an uptrend that essentially takes a pause and
briefly moves against the main trend, only to resume the trend later.

Here, the major trend is up, the midterm trend is sideways, and the
short-term trend fluctuates back and forth, forming the pennant on the
chart.

43
Patterns help to recognize recurring situations, which then provide insight
into whether the trend will continue or reverse. The trend is always the
most important thing in our analysis and the ultimate goal is to develop a
sense of how the chart will behave in the coming hours/days/weeks and to
profit from these insights.

It all starts with identifying the trends in each timeframe. In this process,
we always start from the higher time frame and move down to the smaller
ones. So, we first look at the monthly or weekly chart of an asset, then the
daily, and work our way down further. The most common time frames are
weekly, daily, 4-hour, and 1-hour. For day trading, 15-minute, 5-minute, and
1-minute time frames are also used. However, in daytrading, other time
frames can become important depending on the current situation and the
trade, and every trader has a unique strategy.

Be clear about the three different trends. This is the first step in every
analysis.

Key terms and definitions of trend

When it comes to trends, there are a few fundamental terms that must be
clear. This is absolutely basic knowledge!

44
An uptrend consists of a sequence of higher highs (HH) and higher lows
(HL), and a downtrend consists of lower highs (LH) and lower lows (LL). On
different timeframes, different highs and lows are relevant. We need to
identify and mark these, then we can form our picture of the different
trends on the various timeframes as explained above.

Now we need two important definitions: the moment when the price
surpasses the previous HH or falls below the previous LL is called a break
of structure (BOS).

And the moment when the price in an uptrend falls below the last HL or in
a downtrend rises above the last LH is called a change of character
(CHoCH).

Read this a few times and understand it together with the following chart.
Digest it, and keep it forever!

45
46
Waves

Waves
There's one variable you can change: YOURSELF

Waves
An essential theory in technical analysis, directly associated with the topic
of trends, is the Elliott Wave Theory. This theory was developed by Ralph
Nelson Elliott in 1938 and is named after him.

The theory fundamentally considers trends as waves and is based on the

fundamental pattern you're probably familiar with: an impulsive wave
(numbered phase) is followed by a corrective wave (lettered phase).

Depending on the timeframe we are in, the individual waves are further
divided into waves, so that we can end up with complicated patterns like
the following.

But one step after another!

47
Principles
The Elliott Wave Theory is based on the assumption that collective investor
sentiments fluctuate between optimism and pessimism.

This creates patterns. Elliott's theory states that prices within a trend fluctuate in five
and three waves.

Impulsive waves

An impulsive wave moves in five waves. Waves 1, 3, and 5 represent motive waves,
while waves 2 and 4 are corrective waves.

The following rules apply for identifying impulse waves:

● Wave 4 must not overlap with Wave 1

● Wave 3 is never the shortest
● Wave 2 must not go below the starting point of Wave 1

48
If a chart formation violates these rules, it is not a valid count for an impulse wave. In
this case, the counting should be corrected or another formation is present.

Most impulse waves contain extensions (further subdivisions), which typically occur
– but not always – in wave 3, resulting in the total number of waves being increased
to nine:

49
Occasionally, wave 5 may be shortened, in which case wave 5 does not exceed wave
3.

50
Triangles

Diagonal triangles move similarly to impulse waves in five waves. There are two
types of diagonals: ending diagonals and leading diagonals.

Ending diagonals are mostly found in wave 5 and rarely in wave C. All waves,
including waves 3 and 5, are corrective waves, resulting in a 3-3-3-3-3 pattern. The
diagonals move almost exclusively towards each other.

51
Leading diagonals occur in wave 1 or wave A (if it is a Zigzag). In this case, waves 1
and 4 always overlap, and the diagonals move towards each other. Unlike ending
diagonals, waves 1, 3, and 5 are motive waves, resulting in a 5-3-5-3-5 pattern.

52
Correction Waves
Correction waves move opposite to the higher trend. There are four main categories:
Zigzag, Flat, Triangles, and Combinations.

Zigzag

Zigzag is a corrective wave consisting of three waves labeled A, B, and C. Waves A

and C represent motive waves, while wave B is a corrective wave, resulting in a 5-3-5
sequence against the higher trend. A Zigzag moves strongly against the trend,
containing two motive waves.

Wave C almost always ends below wave A, and wave B must not exceed the start of
wave A.

In a Zigzag, wave B never retraces more than 61.8% of wave A.

53
Sometimes, a Zigzag pattern occurs twice in a row. In this case, it's called a Double
Zigzag. The two Zigzags are labeled with W, X, and Y. This results in a 5-3-5-3-5-3-5
sequence. Here's how it looks in a chart:

Flat pattern

54
Waves A and B are corrective waves in a 3-3-5 sequence. As a result, a Flat is weaker
against the trend compared to the Zigzag pattern. Unlike in a Zigzag, wave C does
not need to end below wave A; if it does, it's called an expanded Flat.

Wave C can end above, which is a shortened Flat. Therefore, a Flat can appear in one
of the following three formations.

Horizontal Triangles

A triangle formation moves in a 3-3-3-3-3 pattern with labels A, B, C, D, and E. This

formation indicates a balance of forces, and prices move sideways with decreasing
volume. Wave E often does not respect the boundary line and may not reach it but
can also exceed it.

There are two variations of triangles: converging and expanding triangles.

Expanding triangles are very rare. Converging triangles have three variants:
symmetrical triangles, ascending triangles, and descending triangles.

55
Combinations

Elliott refers to the mostly sideways combinations of two or three corrective waves
as "Double Three" or "Triple Three." In this case, the waves are connected with labels
W, X, Y, and possibly Z. The designation Z only occurs in "Triple Three." The individual
corrective waves are connected with a 3-sequence.

Here are some examples:

Flat-Flat

Flat-Triangle

Zigzag-Flat

Zigzag-Triangle

Flat-Flat-Flat

Flat-Flat-Triangle

Zigzag-Flat-Flat

Zigzag-Flat-Triangle

Characteristics of waves
Each individual wave has specific characteristics, which I summarized a the
gigantic table.
56
I konw, this is a very complex topic. You don't have to use Elliot Wave
Theory yourself. But I think it's crucial to have a fundamental
understanding of this topic!

The best way to learn this is to come back to this when ever you feel
reminded of it during your analysis or when you come across the topic on
Twitter. In a real example, in a project you've invested in, you'll probably
find it easier to remember these characteristics than to learn them
abstractly.

Below the following table, you can download a gigantic poster I made
for you!

57
[Link]
Download

58
S/R-levels

S/R-levels
Support / Resistance levels - more than just lines

Supply & Demand

Support and resistance is one of the most fundamental concepts in
technical analysis. And as you can see in this chart, this topic really has
relevance.

Let's discover what lies behind S/R-lines.

In the chapter about trends, we've seen that a trend always consists of
highs and lows.

A low occurs when the local demand is higher than the supply, causing the
price to rise. We call this support.

At the top, the supply is higher than the demand, and we call this point
resistance because here the price encounters a resistance (sellers) and falls
back down from it.

59
The more often a resistance or support is touched, the weaker the level
becomes. We will approach the topic from multiple angles.

Let's first look at this scenario. Imagine a trader is holding a position in

good profit and wanting to sell at $0.60, placing a limit sell order.
Whenever the price reaches the $0.60 mark, a portion of our trader's
position is sold.

Since the position is larger than the demand, the price is rejected from this
level. If this happens a few times, then a clear line can be seen on the chart.

60
These straight lines occur especially with smaller projects with low volume.
In Bitcoin or high-cap assets with significant volume, we're more likely to
see supply or demand zones. The underlying concept, however, is indeed
supply (creating a resistance line) and demand (creating a support line).

For small projects and for a fundamental understanding that s/r-levels are
more than just lines drawn on the chart but represent psychology, let's
have a look at the following story.

The Psychology behind S/R-levels

Let's categorize traders into 3 groups: buyers, sellers, and those on the
sidelines. Now, imagine a market rising from a support area. Buyers are
happy but wish they bought more. They are waiting for a dip to add to
their positions. Sellers realize they're on the wrong side, hoping for a dip to
buy. On the sidelines are those without a position and those regretting
selling in the support area, hoping to reinstate them, and undecided
traders now plan to join on the next buying opportunity.

So, even tough everyone has different motivations, they will all buy the
next dip to the support level and the price will rise again from there.

61
A support becomes more important the more trading takes place there,
measured by time, volume, and recent activity.

Now, let's switch things around and imagine that instead of going up,
prices start to go down. In the earlier example, when prices were going up,
everyone reacted by buying more when the price went down a bit, which
created new support. But if prices start to drop and go below the previous
support area, the reaction is the opposite.

Those who bought in the support area realize they made a mistake.
Especially futures traders can't afford to stay in losing positions for long.
They have to add more money or close their losing trades. What initially
caused the support was a lot of people wanting to buy at a certain price.
Now, all those people who wanted to buy are now trying to sell. What was
support becomes resistance.

62
The more important the previous support area was - how recent it was and
how much trading happened there - the stronger it becomes as an area
where prices are likely to stop going up.

Liquidity
When we realize that trading volume in futures is about 4 times higher
than in the spot market, it becomes clear why liquidity plays such a
significant role. The futures market simply operates differently from the
spot market: traders usually use a leverage, so that traders can profit of
even the smallest price fluctuations.

Of course, there are also liquidations, funding rates, etc., but the most
important thing is that it's a PvP (Player versus Player) market. While in the
spot market you can simply buy a crypto, transfer it to your wallet, and
ideally become rich after a few months or years, futures are different. For
every contract, there are two sides: a long side and a short side, and one
side will always win while the other loses.

And who wins? As always, money flows from the uninformed to the
informed. And the market makers will naturally do everything to ensure
they don't end up as losers. Market makers, or liquidity providers as they
are also called, are indispensable in the markets. They make smooth
trading and low spreads (the difference between the buy and sell price)
possible.

63
Because if the majority of traders want to go long - who will take the short
side of their contracts? That's right, the market makers. But if everyone is
going long and the price is rising, and the market makers are sitting on a
huge short position (as the opposite side of everyone), they will eventually
push the price back down to avoid losing in the end. We wouldn't see such
charts without liquidations, stop losses, and market makers. -14% in 4
hours!

64
Trendlines

Trendlines
The trend is your friend
Trendlines are one of the simplest yet most effective tools. They are so
obvious that they carry significant weight, even though, naturally - similar
to support and resistance levels - we cannot rely on a trendline to hold
indefinitely. Because these most obvious lines can get effectively
manipulated. If a trendline breaks, retail traders will go max short seconds
after. Just push the price back above the trendline an hour later, and you've
executed a wonderful trap. Keeping this little game in mind, we still need
to first learn the basic rules to understand manipulation later. Let's get
started.

A trendline connects the tops (in a downtrend) or bottoms (in an uptrend)

as illustrated here. Even though only two points are needed to draw a line,
for a valid trendline, we always require a minimum of 3 touches.

Now, the big question always is whether the wick or the body of the candle
counts. My answer to that is twofold. Essentially, the entire price
contributes to the picture, so the wick counts too. But it also depends.

65
There are moments, especially when the price is heavily manipulated,
where I might decide differently on a case-by-case basis.

The fact that this trendline is quite strong is quite obvious. And the fact
that the trendline sometimes considers the wicks and sometimes not
doesn't bother me in the slightest. I would even accept a break with a
4-hour close and interpret it as manipulation or liquidation event or
whatever it is.

What we can wonderfully see in the above example is how trendlines

reverse their roles, just like s/r-levels do. Resistance turns into support -
trendlines are essentially diagonal S/R lines.

Even though the risk of manipulation always exists, trendlines are still so
interesting for us because the probability of a trend continuing is generally
higher than it reversing. This is a fundamental rule encapsulated in the
well-known saying "the trend is your friend." Even though we may make
decisions based on individual cases in trading setups, and things may
occasionally be different, the probability of a trendline holding is initially
greater than it breaking. And trading is a game of probabilities!

A very good strategy for trading is to always wait for a retest so you don't
get caught - just have a look at the zoomed in example from above. If we

66
don't get that retest, then there's simply no trade - it's always better to
trade less than to lose!

Channels

A channel is a variation of the trendline, where there is a parallel second

line like this:

67
However, it's important to note that the primary line remains the lower one
in an uptrend and the upper one in a downtrend, which is the trendline we
just learned about. The second line can be useful for the following
observation: if the price no longer manages to touch the second line, it can
be an early warning sign of a changing trend.

68
Speedlines

Speedlines are a powerful technique in trading that can provide valuable

insights into potential price movements. Developed by Edson Gould,
speedlines are an innovative adaptation of the concept of dividing a trend
into thirds, offering traders a unique perspective on trend analysis.

69
How to construct speedlines:

From the high on the chart, you draw a vertical line downwards towards
the price of the trend’s low. This vertical line is then divided into thirds. You
can use the fib retracement tool in TradingView for this. Just change the
setting like this and save as a template.

70
71
Next, you draw a trendline from the beginning of the trend through the
two points marked off on the vertical line, representing the one-third and
two-thirds points. In the case of a downtrend, you simply reverse the
process.

Considering that these lines could be drawn in mid-April '23, it's quite
astonishing how accurately the price reacted to the speedlines later in
May, June, and September!

Some thoughts about the interpretation of speedlines: If an uptrend is in

the process of correcting itself, the downside correction often halts at the
higher speedline. If this level doesn't hold, prices may drop to the lower
speedline. Should the lower speedline also be breached, it signals a
potential return to the beginning of the prior trend.

Speedlines can also reverse roles once they are broken. Therefore, during
the correction of an uptrend, if the upper speedline is broken and prices
fall to the lower line and then rally from there, the upper line becomes a
resistance barrier. The same principle applies to downtrends.

72
This old and forgotten technique is like drawing trendlines before they are
even there!

73
Retracements (Video 7)

Retracements
What goes up must come down
Every price movement includes retracements, where prices temporarily
move against the prevailing trend before continuing in the original
direction. We looked at this already in the chapter about Elliot Waves. Now,
we'll have a look at retracements, detached from other concepts, and first
discuss percentage retracements, and then Fibonacci retracements.

Percentage Retracements
Before Fibonacci levels became popular, people used to talk about
percentage retracements, because retracements tend to follow specific
percentage ranges.

The most well-known is the 50% retracement, where prices retrace about
half of the prior move before resuming the trend.

74
Additionally, there are the one-third (33%) and two-thirds (66%)
retracements, dividing the price trend into thirds. A minimum retracement
is usually about 33%, and a maximum is about 66%. These retracement
levels are useful for identifying potential buying or selling areas.

Usually, if prices go beyond the two-thirds retracement, it suggests a trend

reversal rather than a simple retracement. Usually 100% of the trend are
retraced then.

In the crypto market, however, we experience such high price fluctuations

that a trend can retracement by 75% or more without fully reversing.
Nowadays, the 0.786 Fibonacci level is often used for this purpose, which
leads us to the next chapter.

Fibonacci retracements
Today, everyone uses Fibonacci retracements, but the most important
levels (0.382, 0.5 & 0.618) are roughly the previously mentioned: the one and
two-thirds and halfway. The significant relevance of Fibonacci levels is
undeniable to me; just look at the following chart.

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By the way, you can use Fibonacci levels in any timeframe. Here's how to
correctly use the TradingView tool: in an uptrend, click first on the bottom
and then drag to the top. In a downtrend, click first on the top and then
drag to the bottom.

Use this tool always as confluence to other indicators and your general
technical analysis: MAs, round numbers, S/R-levels, etc.

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Reversal Patterns

Reversal Patterns
The point of max profit

Reversal Patterns
We've thoroughly examined the topic of trends and have determined that
a trend is defined by a sequence of higher highs and lows in an uptrend or
a sequence of lower lows and lower highs in a downtrend. As long as a
trend is intact, the probability of it continuing is always greater than it
reversing.

However, the question when a trend reverses is, of course, the most
interesting part, especially for trading. Being able to predict swing highs
and lows accurately is the holy grail - it's the point of max profit.

Most of the time, the trend changes slowly; the sentiment shifts gradually
rather than abruptly. During this transitioning period, certain patterns
sometimes emerge, which we now want to take a closer look at, but let's
start with some basic rules for every reversal pattern!

● Need a prior trend

● The larger the pattern, the greater the move
● Tops are usually shorter and more volatile than bottoms
● Bottoms have smaller price ranges and take longer to build
● Volume is more important at bottoms

As you can see here in the chart below, it's characteristic of tops that the
volume fades and the price collapses because of the fading participation,
while volume spikes usually mark a local bottom. That's because after a
downtrend, the price can only rise if interest increases and the supply
outweighs the demand, while the price usually will go down when the
interest fades (resulting in lower volume).

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Head & Shoulders
The head and shoulders reversal pattern is one of the most well-known
reversal patterns. It is basically the simplest form of interrupting a trend of
higher highs and higher lows by the price failing to make a new higher
high (right shoulder). From that point, a series of lower lows and lower
highs begins - a new downtrend.

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Of course, there's always the risk that while a pattern may look similar, it's
simply a period of sideways price action or a rather short corrective move
and not a reversal. Since the volume profile is particularly important for this
pattern, let's take a closer look at it!

A particularly characteristic and easy-to-remember aspect is that the

volume of the tops decreases. The head has slightly less volume than the
left shoulder, and the right shoulder usually has even less volume than the
head. So the lighter volume of a top is a first warning signal; the next ones
are the break of the trendline and a low below the previous peak (which
should act as support in a healthy uptrend). The pattern is completed with
a close below the neckline. The subsequent downtrend usually extends at
least as far as the head is from the neckline.

Inverse Head & Shoulders

This is the bottom version of the head and shoulders pattern. It is quite
similar, the major difference is again the volume profile. In the chart, you
can see clearly how the volume increases significantly on the right side.
This is especially true for particularly bullish moments, namely the
breakouts above the trendline and neckline.

Other reversal patterns

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Of course, it should be noted that while what's said about volume is
characteristic of the head and shoulders pattern, there are variations as
well. A particular version is the triple bottom or triple top. The same
principle applies as with the patterns just discussed, except that the tops
or bottoms are roughly aligned. These patterns are rarer and have the
same volume profile.
● Tipple Top: with each top, the volume decreases
● Tripple Bottom: the volume increases to the right side with heavy
upside volume when the trend reverses.

The most common reversal patterns alongside the head and shoulders
pattern are the double top and double bottom. For obvious reasons, they
are also referred to as M or W formations.

Double tops and bottoms occur in various variations and are relatively easy
to recognize. Also characteristic of the bottom is the significant increase in
volume during the breakout to the upside.

The most well-known double top in our crypto circles is likely the cycle top
of the last cycle. Here, the second top is slightly higher than the first - a
classic of manipulation, leaving the most retail traders in the believe of
even higher prices.

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As mentioned earlier, volume spikes are much more common at bottoms.
However, there is one exception: the reversal day or so-called blowoff top.

Here's a wonderful example of how in February 2022, Google experienced

exactly that blowoff top, which almost all of Crypto Twitter had predicted
for Bitcoin.

The opposite of these reversal days or Vs, which can also occur as bottoms,
are long-drawn, rounded bottoms, referred to as saucers, which can last for
many weeks or even years.

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Continuation Patterns

Continuation Patterns
The trend stays your friend

Triangles
In the chapter on Elliott Waves, we've already discussed triangles, where
we saw, that this very common form of price pattern is usually a corrective
move within a larger trend. This explains why many continuation patterns
run counter to the trend - bull flags point downwards and bear flags
upwards because they represent a correction against the prevailing trend.
In other words, they are a pause in the current trend and thus, concerning
the prevailing trend, trend continuation patterns.

● Triangles occur in three different forms: symmetrical, ascending, and

descending (see graphic).
● The point where the two lines intersect is called the apex.
● As a general rule, prices should break out in the direction of the prior
trend somewhere between two-thirds to three-quarters of the
horizontal width of the triangle measured from base to apex.
● If prices stay within the triangle past the three-quarters point, this
typically indicating that prices will continue drifting toward the apex
and beyond.
● Volume should decrease as price swings narrow within the triangle.
This pattern of decreasing volume is characteristic of all
consolidation patterns.
● However, volume should notably increase upon breaking through
the trendline that finalizes the pattern.

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While the symmetrical triangle itself is neutral and only gains predictive
power in combination with the prevailing trend, ascending triangles are
generally more bullish because buyers are more aggressive than sellers.
The opposite is true for descending triangles: it's generally more a bearish
pattern, because sellers are more aggressive than buyers.

Broadening Top
The last triangle I would like to mention is the inverted triangle or
broadening formation. It is called broadening top for a good reason: it is
not a triangle as we have just learned, but a rare formation, mainly
appearing as a major top at the end of a bull market. The volume steadily
increases in parallel with the expanding price swings. This pattern thus
represents an unusually emotional market with significant retail
participation. Therefore, the pattern is rather rare and especially found at
the end of a bull market, and of course it's not a continuation pattern, but a
reversal pattern!

Flags and pennants

These are essential continuation patterns, primarily occurring in the short
and mid timeframes (1-3 weeks or on the hourly charts). They are
somewhat of a brief pause in the trend. This is also the main difference

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between pennants and symmetrical triangles. Pennants are typically
short-lived, while triangles can be formed over a longer period.

However, the transition is naturally fluid. That's also why I usually just say
continuation pattern unless it's immediately obvious that it's a flag, etc.
Because essentially, all continuation patterns work the same way: it's also
characteristic for flags and patterns to run counter to the main trend and
have decreasing volume. The volume then increases dramatically upon the
break of the pattern.

A significant advantage of flags and pennants, however, is that they

typically "fly at half-mast", wich means they occur halfway through the
move, which is extremely useful information for predicting further price
movements!

The Wedge
This is essentially a symmetrical triangle, but with a clear tilt in one
direction. Again the basic principle applies: a bullish wedge opposes the
trend and therefore points downwards, while the bearish wedge is tilted
upwards. Like the symmetrical triangle, it falls into the timeframe category
of 1 to 3 months.

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If a wedge is pointing upwards in an uptrend, it could potentially be a hint
of a trend reversal. In this case, the wedge would then be a reversal pattern.
However, as mentioned, it is much more common for the wedge to point
downwards in a bullish trend, indicating a trend continuation pattern.

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Volume & Open Interest

Volume & Open

Interest
For spot and futures

Volume
In technical analysis, we focus primarily on three numbers:
● Price
● Volume (number of shares or contracts traded during a specific
period of time)
● Open interest (number of open contracts for a specific futures
contract)

While volume indicates the level of activity in a market, open interest can
be seen as indicating future volume, because when many contracts are
opened, they have to be closed in the future, which naturally generates
additional volume.

So with open interest, you can (very roughly) glimpse into the future of
volume: when OI significantly rises, it's usually a sign that a larger move
with substantial volume is imminent.

Similarly, volume also provides a hazy impression of the future price.

Because what we primarily use volume and OI for is to identify
convergences or divergences: are Vol and OI supporting the trend or not?

Let's consider the following scenario: we have a strong uptrend with high
volume. This tells us that traders are interested in the asset and are buying
it in large numbers. The trend is strong and is more likely to continue than
to reverse. But what if the price continues to rise, but the volume keeps
decreasing? This tells us that interest in this asset is waning. The trend is
not as strong as before and could potentially reverse. Usually, we consider
the ratio of volume to price as shown here:

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Open interest
With open interest, things are a bit more complicated because it depends
on who is buying from whom. There is a buyer and a seller for each
contract and Open Interest measures the total number of contracts. The
number of longs and shorts combined is thus double, as each contract has
both a short and long side. Changes in open interest can occur in several
ways, as outlined in the following overview:

1. When open interest rises in an uptrend, it usually indicates that new

money is flowing into the market - this is bullish.
2. If the price is rising but OI is declining, it suggests shorts covering,
meaning shorts in losing positions are closing their positions. Even
though this brings short-term buy pressure from the closed shorts,

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 money is flowing out of the market while the price is rising. Once the
short covering is completed, the trend may lose momentum.
3. If the price falls and OI rises, then new money is entering the market,
but primarily on the short side - bearish.
4. However, if the OI is decreasing alongside falling prices, it suggests
that the decline in price is driven by losing long positions being
compelled to sell off. It is likely to cease once open interest has
decreased adequately to indicate that the majority of losing long
positions have concluded their selling activities. This suggests that
the downtrend will probably stop once most losing long positions
have finished selling.

To have a good level of reliability, open interest is always considered

alongside price and volume. This results in the following table.

However, it's always best to consider the big picture. What's the sentiment
like, what is currently happening in the market?

On Balance Volume
As we're talking about volume, it's time to discuss a first indicator: On
Balance Volume or OBV. Because the volume bars beneath the chart can
sometimes be quite confusing, Joseph Granville introduced this indicator
in [Link]'s evident how much simpler it becomes to track volume trends
using the OBV line.

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Constructing the OBV line is straightforward: each day's total volume is
assigned a positive or negative value based on whether prices closed
higher or lower on that day. This creates a cumulative total by adjusting
each day's volume according to the market's closing direction.

What's crucial is the direction or trend of the OBV line rather than its
numerical values. These values can vary depending on the historical period
being analyzed. Ideally, the OBV line should align with the price trend; for
instance, in an uptrend, both prices and the OBV line should exhibit higher
peaks and troughs. Conversely, in a downtrend, they should both decline.

Any discrepancy between the volume line and price movement signals a
divergence, indicating a potential reversal in trend.

Speaking of indicators, let's move on to the next chapter!

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Indicators

Indicators
Helpful, but not magic

Indicators
Indicators are a matter of belief: some traders are using only one indicator,
some a whole dozen, and others none at all.

What you need for your analysis, you have to figure out for yourself! But it's
essential to know them, understand their advantages, and especially their
limitations. Let's start with the most important limitation.

Most indicators are trend-following, meaning they reveal something that is

currently happening or has already happened. They can't predict the
future. However, they also have an advantage: they are objective and
neutral, which allows for the development of trading systems with their
help.

Moving Averages
Every price movement includes trends, where prices move in a specific
direction over time. Moving averages (MAs) are smoothing out price data
to identify these trends. They average prices over a specified period,
reducing noise and highlighting the direction of the trend. If you combine
averages from different timeframes, you can create simple trading
strategies.

● The Simple Moving Average (SMA) is calculated by adding the

closing prices of an asset over a specific number of periods and then
dividing the sum by that number of periods. For instance, a 10-day
SMA sums the closing prices of the last 10 days and divides by 10.
● The Exponential Moving Average (EMA) is calculated using a
multiplier that applies more significance to recent data. This way it
gives more weight to recent prices, making it more responsive to
new information.

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● 200-Day MAs: This time period is widely used to identify long-term
trends. If the price is above the 200-day MA, it’s generally considered
a bull market; below it suggests a bear market. MAs can act as
s/r-lines.

● Golden Cross and Death Cross: A golden cross occurs when a

short-term MA (like the 50) crosses above a long-term MA (like the
200), indicating a potential uptrend. Conversely, a death cross (when
the short-term MA crosses below the long-term MA) indicates a
potential downtrend.
● In TradingView, you can easily change the lengths and timeframes in
the settings:

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There are many different strategies for moving averages - you could
probably write a whole book on that alone. Here, I want to focus on some
basic principles.

Many automated trading bots operate based on moving averages. That is

why MAs often act as flexible support/resistance-lines. And especially
long-term moving averages have a huge psychological effect (remember
the 200 daily from above).

How well MAs work as s/r-levels sometimes can you see in the following
example too. The 4hEMA50 (EMA with a length of 50 on the 4h timeframe)
is acting as a very strong s/r-level.

At other times the same length doesn't work at all. It is your job to find a
MA that is useful in the current market phase and timeframe!

Relative Strength Index

The Relative Strength Index (RSI) is a momentum oscillator that measures
the speed and change of price movements. For this, the average gain and
average loss are calculated over a specified period (commonly 14 days). It

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ranges from 0 to 100 and is used to spot divergences and to identify
overbought or oversold conditions.

● RSI values above 70 typically indicate that an asset is overbought and

may be due for a correction. Values below 30 suggest that an asset is
oversold and may be due for a rebound. But please always
remember: RSI measures momentum and the stronger a trend is,
the longer the RSI can stay in an extreme region!
● Divergences between RSI and price action can signal potential
reversals. For instance, if prices are making new highs but RSI is
making new lows, this could indicate weakening momentum and a
potential reversal.

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Moving Average Convergence Divergence
The MACD is another trend-following momentum indicator that shows the
relationship between two moving averages of an asset’s price. It consists of
the MACD line, the signal line, and the histogram.

The MACD line is calculated by subtracting the 26-period EMA from the
12-period EMA, the signal line is a 9-period EMA of the MACD line, and the
histogram is showing the difference between the MACD line and the signal
line.

● Crossovers: When the MACD line crosses above the signal line, it’s a
bullish signal; when it crosses below, it’s bearish.
● Divergences between MACD and price action can signal potential
reversals, just like RSI. If prices are rising while MACD is falling, this
could indicate weakening momentum.

In the chart, you can clearly see how particularly bullish or bearish
moments always coincide with a confirmation in the MACD.

But not every cross predicts the future trend - always use this as
confluence to your general TA!

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Bollinger Bands
Bollinger Bands consist of a middle band (typically a 20-day SMA) and two
outer bands that are standard deviations away from the middle band. They
adjust dynamically with price volatility.

● Overbought and Oversold Conditions: When prices touch the upper

band, the asset may be overbought. When prices touch the lower
band, it may be oversold.
● Volatility: The width of the bands increases with volatility and
narrows during periods of low volatility. Squeezes (narrow bands)
often precede significant price movements.

Volume Range Profile

The Fixed Volume Range Profile is a powerful tool for traders to analyse the
distribution of trading volume over a specified price range within a given time period.
This tool is commonly used to identify key price levels where significant trading
activity has occurred, which can provide insights into potential support and
resistance levels, market sentiment, and future price movements.

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● The Fixed Volume Range Profile plots horizontal bars representing
the volume traded at each price level within the selected range.
● This helps traders see where most of the trading activity has
occurred, indicating areas of high interest and potential price
congestion.
● Unlike dynamic volume profiles that update continuously, the Fixed
Volume Range Profile allows traders to manually select a specific
range on the chart - this is especially useful in ranging market
conditions!
● The POC is the price level with the highest traded volume within the
selected range. It is a critical level that often acts as a magnet for
price action, as it represents a fair value area where buyers and
sellers are most active.
● The Value Area typically encompasses around 70% of the total
volume traded within the selected range. It consists of the Value Area
High (VAH) and Value Area Low (VAL), indicating the upper and lower
bounds of this area.
● Price movements within the Value Area can suggest a balanced
market, while moves outside of it may indicate trends or breakouts.
● High Volume Nodes (HVN) and Low Volume Nodes (LVN) are price
levels with significant and minimal trading volume, respectively.
HVNs often serve as strong support or resistance levels, while LVNs
can indicate areas where price might move quickly due to lower
trading interest.

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