G’day everybody, Craig Cobb from the Grow Me Co.
This could be one of the most important weeks we’ve had in crypto for some time, but that doesn’t mean I need to have a position.
In fact, right now, my biggest trading position is effectively cash.
I’m not actively trading, and I’m not aggressively looking for new positions. Bitcoin is stuck in consolidation, the market has already shown us how violent these macro-driven moves can become, and we’ve got two major events directly in front of us: the CLARITY Act procedural vote and the FOMC rate decision.
Sometimes the best trade is simply knowing when not to trade.
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Bitcoin Is Giving Me No Reason to Force a Trade
Last week I told the people in my Discord community that I was stepping back.
The reason was pretty obvious once CPI and PPI hit.
Look at the Bitcoin candle.
We got a massive whipsaw. If you were trading the shorter-term trend and went long, there’s a good chance you got stopped out. If you went short, there’s a good chance you got stopped out as well.
That’s not the environment I want to trade.
It’s different if you’re holding a longer-term position with an entirely different risk structure. I’m talking specifically about active trading and following trends.
When volatility becomes that unpredictable, cash is a perfectly legitimate position.
Bitcoin’s daily chart isn’t giving me much more information now. Most of the significant movement has happened in a couple of large candles, with very little consistent price action between them.
Last week Bitcoin closed down approximately 4.37%, but even that doesn’t tell me very much.
Zoom out and we’re still basically consolidating between approximately $76,000 and $82,000.
If Bitcoin breaks through the bottom of that range with momentum, then the chart starts telling us something.
Until then, it’s consolidation.
The total crypto market cap looks very similar. The altcoin market has shown a stronger move and cleaner pullback, but I’m still not seeing anything compelling enough to make me think I need to put my money to work immediately.
CLARITY and the Fed Create Two Major Risk Windows
Now look at what’s coming.
The first major event is the CLARITY Act cloture vote, scheduled for Tuesday afternoon.
We’ve seen crypto regulatory events disappoint plenty of times before, so I’m certainly not predicting some enormous bullish outcome.
The point is that we don’t know.
And in a sideways market already prone to large whipsaws, a significant regulatory announcement can create exactly the type of price action I don’t want to be sitting through with an active short-term position.
Then we go straight into Wednesday and the FOMC.
The actual interest-rate decision matters, but the number itself isn’t necessarily the most important part.
Markets price probabilities.
By the time the announcement arrives, traders frequently have a strong expectation of what the rate decision will be. Sometimes that expectation is correct, sometimes it isn’t.
But even when the actual decision matches expectations, the market can move dramatically based on the language surrounding the decision.
Is the Fed hawkish?
What does it say about future rates?
How concerned is it about inflation?
What does the statement suggest about the next meeting?
I’ve been trading long enough to know that words can move markets just as aggressively as economic data.
So I’ve got a sideways Bitcoin market heading directly into two potentially volatile events.
Why do I need to trade that?
I don’t.
Knowing When to Stay Out Is Part of Trading
This is probably one of the hardest lessons for traders to learn.
When markets are good and you’re making money, trading feels easy. You’ve got clean trends, good cyclicity and setups that fit your strategy.
The harder question is: how do you stop yourself from giving that money back?
That comes from experience.
Let’s say tomorrow morning I find an absolutely beautiful setup. It’s got a strong cyclical trend, clean structure and everything I normally want.
Would I take it?
Potentially.
Would I want to be holding that position as we approach the CLARITY vote or the FOMC?
Absolutely not.
When I traded foreign exchange more heavily, I used to trade the windows between major economic announcements.
If a major announcement was approaching, I’d close the position and evacuate.
There’s a reason for that.
The moment you start saying, “Yeah, but what if it spikes my way?” you’re no longer talking about your trading strategy.
You’re gambling.
Maybe it does spike your way.
Maybe it spikes the other way.
You don’t know.
Neither do I.
The difference is that my trading is based on patterns and probabilities that I’ve developed and tested over more than 20 years. I’m looking for repeatable structures where I can define my risk.
Holding through a binary event because I hope the market moves in my direction isn’t part of that process.
That’s luck.
So my big trade to start this week is very simple:
I’m staying out.
I’m waiting for CLARITY.
I’m waiting for the FOMC.
I’m waiting for Bitcoin and the broader market to show me something worth trading.
Once that happens, I’ll start looking for opportunities again.
Until then, there’s nothing wrong with cash.
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