Today’s trading spotlight deals with the cryptocurrency of Cream Finance $CREAM. The cryptocurrency saw a massive spike going from ~ $7.50 on the 19th all the way up to $25 on the 20th of November. As I saw the chart on the 20th with so many shorts adding to the position I posted a tweet predicting this would go to $15. I was wrong predicting the $15 as it went all the way to $25. I keep underestimating the power crypto can have combined with at times illiquid tokens that make this possible. Below is the tweet followed by a chart showing at what time I tweeted.
As always, I do not want to brag to you about this. I can’t anyways, as I lost on the trade trying to long it around $11ish, as I was 2 hours early and got stopped out, then went on to miss the trade ;(.
Now, why do I bring the token up here on the trading spotlight newsletter?
I think the party is not over and there will be good possibilities to profit on this one. The current funding rate (the rate of longs to shorts) is at -3.0%, which is heavy negative, so shorts will pay longs. Compared to that the funding rate for BTC at ByBit at this time is 0.01%.
So Shorts have to pay the Longs a fee if the Countdown goes to 0:00:00, which happens every 8 hours. So everyone who is long will get paid their Position Value*Funding Rate, which can be a lot if you have a big position. So on to the plan, I think these levels will consolidate for some time, then squeeze out everyone who is adding short at the moment.
The plan is as follows. Establish a Long position with a tight stop in case the plan does not play out. Entry area looking for about $11.50 - $12. Wait for a potential squeeze, which I think could go to about the $16 area. Sell the long there and switch to a Short position risking very tight again. In the chart below you can see my support and resistance lines. Long pick up would be around the green line with switching to Short at the second red line (second red line from the bottom).
I hope this gives you an idea about my plans for the cryptocurrency Cream Finance. If the token just drops below $11 and does not come up again, I might add a small Short position, but the squeeze potential is just too big, as you can see on the big wick above.
If you would like to get these plans directly to your inbox feel free to subscribe to my Twitter newsletter or follow me. I also post Trading Reviews, where I post my trades with statements to help educate, no matter if win or loss.
Have a great start to your week and stay safe everybody.
Niklas
This is not financial advice, it is for educational purposes only!
If you have 2 minutes, I would appreciate it if you could give me feedback that I can use to improve my writing. For the feedback you can take part in the feedback survey: https://forms.gle/EfkFpn31K65QeQhh7
