This chart is primarily for indicating whether to weigh your portfolio in favour of ETH or BTC. I'm currently heavily weighted towards ETH, but recent price actions has me looking very closely at the chart. What we are looking at today is a clear break of the short term uptrend, combined with a crossover on the MACD 4C indicator. Both are typically nice sell signals. Unfortunately, indicators are not perfect. They mostly reflect past price action, and most importantly become very unreliable when there is low volume. So when we used them we must use some discretion in their interpretation. I'm discussing these issues as today I'm choosing to ignore some of the clear sell signals in favour of a "wait for more evidence" position.
The most important influence on this decision is the current ADX. If you look at the two lines/histograms that represent the DI+ and DI-, you can see they are both below the threshold line indicating that there is currently little trading activity and a very weak trend. What price action there is, is still dominated by the green (even on the 4hr chart). I have placed a pink vertical line where there is a previous example of this. The indicators are virtually identical and because the ADX is very low the price action following the "sell signals" only moves slightly down before regaining its upward momentum.
For this reason today I'm sitting on my hands and leaving my position with ETH as it is. If tomorrow the price action has shown increased momentum to the downside I may shift that position, but not for now.
The most important influence on this decision is the current ADX. If you look at the two lines/histograms that represent the DI+ and DI-, you can see they are both below the threshold line indicating that there is currently little trading activity and a very weak trend. What price action there is, is still dominated by the green (even on the 4hr chart). I have placed a pink vertical line where there is a previous example of this. The indicators are virtually identical and because the ADX is very low the price action following the "sell signals" only moves slightly down before regaining its upward momentum.
For this reason today I'm sitting on my hands and leaving my position with ETH as it is. If tomorrow the price action has shown increased momentum to the downside I may shift that position, but not for now.
