We are down almost 70% from the all time high ( ATH -0.58% ) within 2 months. This has been a significant drop. More significant than anything we have seen since 2014. On the smaller time frames, including the daily, we are now in a bear market trading below the EMA200 (so the cyclical trade is to the downside). This means we are looking for a change in TREND before opening long positions to mitigate risk. How do we know when there is a change in trend? When we are trading above the EMA200 on the daily, and find support above that EMA . (note RSI on the daily is super oversold).
BUT! We must also look at the larger context:
On the weekly log scale, it appears to be something of a normal pattern. I will be watching the EMA50 very carefully as we do not want to close a weekly candle below that moving average. Data shows us that the last time that happened, we had a bear market for a year.
At this stage, if you are holding crypto assets we need to wait for the market to come back around to make a decision to sell.
Right now we are looking at a key level of $7271, which needs to be cleared in order for stability to return to the market. If we break through the green line to the upside, we will head toward $8692.60 where we will likely make an attempt to reach $10,000. It is in this resistance zone that we will be watching the market and looking to exit our positions if you are still holding. If we trade higher, the next level to watch will be $12,935.
If we cannot pass $7271, there is a chance of breaking down to the next support zone around $3500. If we do, I do not suspect we will be down there for long at all. And I will be buying heavily down there without a trend reversal confirmation.
As always, I'll keep updating this idea actively.
Cheers,
Erik
BUT! We must also look at the larger context:
On the weekly log scale, it appears to be something of a normal pattern. I will be watching the EMA50 very carefully as we do not want to close a weekly candle below that moving average. Data shows us that the last time that happened, we had a bear market for a year.
At this stage, if you are holding crypto assets we need to wait for the market to come back around to make a decision to sell.
Right now we are looking at a key level of $7271, which needs to be cleared in order for stability to return to the market. If we break through the green line to the upside, we will head toward $8692.60 where we will likely make an attempt to reach $10,000. It is in this resistance zone that we will be watching the market and looking to exit our positions if you are still holding. If we trade higher, the next level to watch will be $12,935.
If we cannot pass $7271, there is a chance of breaking down to the next support zone around $3500. If we do, I do not suspect we will be down there for long at all. And I will be buying heavily down there without a trend reversal confirmation.
As always, I'll keep updating this idea actively.
Cheers,
Erik
Comment:
We cleared the 200ema on the 4HR! We came back down and tested the key moving average. RSI and MFI are showing us a bit of selling pressure here (sell signal), though, so we need to watch for a breakdown here (a breach of the red channel to the downside). Otherwise we continue to our original target of $12.9, where we look to exit out position. Its bullish to be trading above the 200ema is bullish, now we just need that golden cross (when the 50ema crosses over top the 200ema) ;)
Comment:
We are kissing the top of the downtrend line! This is a make it or break it level!!!
Trade closed: target reached:
We couldn't break out of the downtrend channel! So this could be the beginning of the downtrend continuation. If you look, the golden cross was a fakeout! The EMA50 is crossing down below the EMA200 again (death cross).
I've closed long position. We didn;t get all the way to the 0.618 on the chart, but thats okay. Next level I'm watching to get long is $8692. If we breakdown there, we short to $6621 or even lower.
I've closed long position. We didn;t get all the way to the 0.618 on the chart, but thats okay. Next level I'm watching to get long is $8692. If we breakdown there, we short to $6621 or even lower.
Comment:
I've been shorting the last few weeks. Remember, a close of $8692 will breakdown this market. I'm looking for that scenario based on the megaphone contiunation pattern forming since the 9th of March.
Comment:
Comment:
I'm watching for us to clear the 200ema on the 4HR, and then looking for a golden cross along with clearing some of the resistance lines.