ETHUSD: 300 Possible, But Reversal More Probable.

ETHUSD update: Bearish price action leads to break of major support area. Now that key levels like 400 and 374 have been cleared, the broader strength of this market is thrust into question.

And the answers can be found when you look back in time. The 300 area, which dates back to November of 2017 was a major break out for tihs market. There is a tendency for old resistance to become new support and if the inversion holds true, 300 area is a possibility to consider.

The fact that price broke 374 places it into a very wide reversal zone that has a boundary in the 280s (not on chart for simplicity). This means next 100 points below offer increased potential for a broader reversal.

At S.C., we had long swing trades in this market and in LTC which were stopped out. The stop at 386 saved us from an additional 40 points of pain. We still hold inventory in BTC because as ugly as this sell off is, the broader structure is not bearish yet.

This entire space is contingent on BTC recovering. And as bearish as the herd is, they are not paying attention to the probability of the location. As long as the low 6Ks or even 5750 holds, the broad bullish impulse structure is still intact. The potential for a bottom to materialize in this area is high.

At S.C., we do not make "predictions" like many of the other "experts". Instead we evaluate probabilities, manage risk and adjust to new information. Following the herd is something we do not participate in.

Probabilities tell us that the current lows are an accumulation opportunity across the board. Our risk management rules tell us to wait. We intend to buy inventory and take on another swing trade long when the structure lines up.

In summary, price can remain weak on the short term, but it is nothing more than an ugly shake out. Just like 18.5K on BTC had the world betting on 30K, these depressed prices are the polar opposite. Even if we could short here, we wouldn't even think of it.

It is funny how no one is afraid to buy at 1250, while no one is afraid to sell at 350? History has proven the crowd is usually wrong at extremes and this situation is no exception.