DailyClose
Long

Ethereum Leading the Way for a Bitcoin Breakout Toward $12,000

COINBASE:BTCUSD   Bitcoin / U.S. Dollar
One thing that has been a constant for the past few months has been how correlated the crypto and stock markets have been. This afternoons post will be on the current state of the crypto markets after seeing how the U.S. equity markets closed the week. Just a heads up, it was a bullish close to the week. Let's get into the charts!

The Bears are Dead

I titled this the bears are dead because it is pretty much what will happen if the bullish scenario takes place. All hopes for a crypto dip will die. All hopes that fundamentals will take hold of the stock market will disappear. That is exactly what they want to happen. When the bearish narrative dies so will the rally. Below is the Ethereum chart I posted this morning on twitter .


As you'll see on this post I am not using indicators. Using price and classical charting methods to make my calls. What I was calling for this morning was a head and shoulders top reversal and another weekend sell off. Not that I was wrong, I did say it was possible. However, I am beginning to like the bullish side of the trade. See below.


I honestly did not see this coming. It makes perfect sense though. The stock market has been strong throughout the week after opening on a large gap up. Today the market closed in positive territory and while the SPX and NDX had daily hammer reversal candle closes off support. So, is this inverse head and shoulders reversal on the Ethereum chart real? We will not know for certain until we get a clean breakout. However, with a breakout we could easily see $300 reached.


Use the channel I have drawn above as a potential stop. The top of the channel should be used as resistance if price were to exceed the $300 price target. As it stands...Bias: Bullish and BTFD.

How About the King?

So if Ethereum is bullish how is the King of Crypto holding up? You guessed right. Its holding up pretty well. See the chart below.


If Ethereum does breakout and Bitcoin continues to consolidate into an ascending triangle the high target is approximately $12,000. Conveniently putting Bitcoin at the high of the weekly candle close from last year. This will serve as STRONG resistance (see resistance #2).


As long as the stock markets continues to show strength so will crypto. It is the current trend and you know the saying...the trend is your friend. Bias: Bullish.

I hope you all have a great long weekend! Happy trading!

Comments

Good idea
+1 Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing Refer a friend House Rules Help Center Website & Broker Solutions Widgets Charting Solutions Lightweight Charting Library Blog & News Twitter
Profile Profile Settings Account and Billing Referred friends Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out