Yesterday was a great example of why I have been saying that shorting alts vs BTC is the safest bet. When BTC pumps in a bear market alts often FOMO back into it and/or have trouble keeping pace. I set a tight stop loss on my ETH:BTC short at 0.0731 which will ensure that position is profitable. That stop has not been triggered even with all of the from yesterday. Trading is very stressful and I like to detach from the markets after getting stopped out. Today I played in a golf tournament and went out for Mexican food and margaritas afterwards. Keep that in mind when reading the analysis below!
For me this weekend is about resetting and going back to the drawing board. I am 99% confident that $5,775 was not the bottom and will be preparing for the next entry. Therefore I will be trying to figure out how much further this dead cat can bounce.
Below is a rough draft of my next entry. I like to start by looking at all of the indicators that have proven to be useful in the past. Always beginning with higher time frames before zooming in.
The visible range profile illustrates buying and selling for specific price points. This is a very useful tool for determining major areas of resistance and support.
On the we are seeing large at $6,762. That is where there was significant support and we should expect that price to turn into significant resistance.
When zooming into the 4 hour chart we get a more detailed view. It is showing three significant areas of at: $6,506, $6,731 and $7,544
The moving averages on the should also help to determine major areas of resistance. Below are the 50 (green) and 200 (orange) period MA’s. Notice that the 200 period MA is starting to posture downwards. That is a indicator and is why I drew the area of resistance (red box) at $8,800. It should continue moving downwards as the price moves up.
Below is the Ichimoku Cloud on the with 20, 60, 130, 30 settings. It will illustrate potential areas of resistance with the Tenkan-Sen, the Kinjun-Sen and the Cloud. As you can see the Tenken-Sen has been an area of strong resistance over the past two weeks.
The next levels to watch out for are $7,750 where the Kijun-Sen is waiting and $8,000 where the bottom of the cloud hovers.
Nothing outlined above is a trade recommendation, it is nothing more than going back to the drawing board. Over the next couple days I will be refining my outlook and expect to have more specific trade recommendations.
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