Do you guys remember when I posted this chart about the cartel, manipulation, etc..? Look where we are now. I hope you all made money from those lows as this thing has moved up.
This analysis is going to have more to do with a POSSIBLE scenario that could play out and how it would unfold next week. This is more about the WHY of how a scenario could unfold. Couple disclaimers: I am NOT short right now, my BIAS for this POSSIBILITY IS. I am in all CASH right now on my trading account. I do have some long-term investments, but thats different from trading
On Monday the SEC is gathering together to talk about whether Crypto should be classified as a Security, specifically Ethereum. Here is one thing I am 100% certain of:
The SEC, FINRA, CFTC, CBOE, etc... views crypto and ETH as a SECURITY. There is doubt they do, BUT it meets every definition of being a security, why people think otherwise is beyond me.
there is a bias right now that if it gets called a security that we are going to go plummeting down and everyone is going to dump. This is why I am in CASH. It's risk vs reward. If I miss a 10% move on the upside to save myself a potential 40-50% drop. That's fine by me. Remember, after a 50% drop, it takes a 100% return to make that up. i don't know how the hearing is going to play out, the SEC already has a bias that crypto security, so why is there this "mysterious" shroud of how they are going to be classified is beyond me. It makes ZERO sense. They will classify them as securities, its just a matter of WHEN. If you are saying "Sherem that's non-sense" I say, look at all the big players pushing for it. Gemini is partnering with Nasdaq. Coinbase came out with an Index to attract institutions. Goldman bought Poloniex via The Circle. the list can continue. They recognize that this technology is revolutionary and they feel you need price stability to make it effective. Regulation, options, and futures are how you do it. The big players make money off of crypto being used, traded, it doesn't matter if the price goes up or down for them. You need to recognize that.
Let me iterate. THIS IS A POSSIBLE SCENARIO that this thing could plummet on Monday. I posted my technical view in another chart, see below. if you are profitable, I would recommend taking half off the table and put a stop on the rest to lock in, ideally below that trendline. Read my technical analysis for a little more detail
Remember: It's better to be out of the market wishing you were in, then in the market wishing you were out.
Happy trading, -Sherem
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Please hit the like button if this helps!
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More of the technical commentary of the chart:
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Keep a close eye on this $9,500 level and trend line.
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We are starting to confirm a down move. Another daily red candle should confirm it. There is support at this 9k level, and once we break this we are going down further, at least 8k. Your short entry point is on any rebound like around 9500. Traders like Vera are already short if you want to check her chart out.
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Chart update. We are making lower lows on the smaller time frames. I wouldn't be surprised if we get a slight push up before we resume down but this 9k area you need to watch. Once we crack that mark you can look for further downside potential.
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We are knocking on this 9k mark, should chop its way through it and march down.
Yes please short and when you lose your money follow me
this is how previous chart developed. If you look at my old post and the updates you will see I called it since 25 April -
dinopiccinin
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@Ragnar_Dragneff, That's IF he loses money shorting. You don't actually know but you've made some good calls lately and I'm not surprised to see it go to your head.
Sherem
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@Ragnar_Dragneff, Bro, you should actually read my post before commenting. I am in cash, not short.
"This analysis is going to have more to do with a POSSIBLE scenario that could play out and how it would unfold next week. This is more about the WHY of how a scenario could unfold. Couple disclaimers: I am NOT short right now, my BIAS for this POSSIBILITY IS. I am in all CASH right now on my trading account."
BDG
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If the SEC declares cryptos are a security, then it goes offshore and trading will go underground and the U.S. will lose the tax revenues. But it won't affect the other countries unless they too are stupid enough to reject the taxes that it can bring in as well. The courts will use the Howey Test to determine if it is a security. In 1933 they had to invest "money" into the transaction. Then the govt later watered it down to include other investments of value instead of just money. (We all know cryptos are not money, otherwise the gov't would have told us so and that's the last thing they want to see happen. Why? Because you can't tax an exchange of money like you can with a security.)
Under the Howey Test, a transaction is an investment contract if:
1) It is an investment of money
2) There is an expectation of profits from the investment
3) The investment of money is in a common enterprise
4) Any profit comes from the efforts of a promoter or third party
@BDG, The US hardly gets any tax revenues right now. It will just increase as the big players are already set up to report those things.
It could very well be argued that crypto meets those 4 criteria. You invest money, you expect profits, it's common enterprise and third parties profit and it gets promoted. ICO's especially. the last one you could say no one promotes bitcoin specifically to get gain and that would be the gray area between currency and security since it's decentralized. But one thing is for certain, they will regulate it.
BDG
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@Sherem, a lot of us got punked yesterday. There never was a SEC hearing for determining if ETH was a security. We should have visited the SEC webpage and looked at their press releases for news of them regulating cryptos. It was all FUD to get people to sell their cryptos.