I pointed out the resistance from the 12 period EMA on the daily chart, the double top on the 4 hour chart, the resistance cluster coming from the trendline and horizontally, and I also noted the shooting star and hanging man candles on the daily chart.
Needless to say a strong sell recommendation followed and as usual I lined out exactly how I would set up the entry. Start with 33%-50% and then add upon a new low of $6,300 or a continued rally to $7,000.
That trade is now well into the money for anyone who took advantage of the opportunity. Now it is time to review the stop losses and adjust accordingly.
I mainly use Bill Williams Fractals on the daily/weekly chart to set my stop losses. Those have been adjusted as follows:
The stop loss for ETH:BTC is unchanged mainly because it has yet to pull back like the USD pairs have. I also feel comfortable giving it some room due to how likely it is to pullback.
The volume behind today’s selloff has been convincing and is not indicative of a bear trap. We are fast approaching the yearly low of $5,975. A breach of that level will lead to significantly more selling volume.
I fully expect that area of support to breakdown over the weekend. It provided a very nice bounce the first time around, a much smaller one on the second and now I feel confident that it has been exhausted as an area of support.
I have an order set at $5,974 to add to my short as soon as support breaks down. If not currently in a position that is the safest bet IMO.
Now that we are gaining momentum and the price picks up velocity it can be helpful to watch the shorter time frames. I am a firm believer that moving averages will paint the clearest picture about short term price movements. Choosing the right time frame is often the most important variable.
I am watching on the 12 period EMA on the 10 minute chart.
I do not use this to make entries/exits, it is simply a tool to help me understand where to expect short term resistance.
If you are not currently in a position then I have listed some possible entries below:
Entries and profit targets
Sell BTC:USD below $5,975 | $4,975 target Sell BTC:USD if bounces to ~$6,300 | $4,975 target Sell ETH:USD once it breaks down below $450 | $360 target Sell ETH:BTC once it breaks down below 0.0749 | 0.055 target
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