ETHUSD Update: Breaks support and confirms 315 double top while BTC breaks out beyond it's resistance zone and makes a new high. All the alt coins are lower on these new BTC highs and to me, a mixed environment such as this is a red flag.
I have been writing about the resistance in this market and now that the 303 support (.382 of recent bullish swing) has been taken out, the double top is in play. The 280 support zone retest offers potential supportive price action, but I have no intention of getting long. If you have been following the levels I have been writing about, price has been reacting nicely off them which can offer day trade opportunities for those who are into that.
As for BTC, perhaps the community of participants are buying the rumor and selling the news, I do not know, but I can tell you this: The relative weakness of the alt coins is a red flag. What happens if BTC sells off? Are they going to revert back to their inverse relationship now? This kind of mixed environment urges ME to stay away even more. Like I wrote about previously, markets pull back, and I will wait for the pull back. It may not be steep since BTC has cleared a major resistance zone, but I can at least reevaluate the structure to determine a reasonable level to retest.
The fact that ETH has retested supports while BTC pushed highs I interpret as a sign of weakness. Now that the double top is in play, I have no intention of buying the upcoming supports which are the 291 to 286 area. If 280 breaks (which has been a great support for day trading) then I will be watching for price to work its way back into the 260 area. Also the 303 to 308 area is now a minor resistance (.618 of recent bearish swing) and any attempt back up to 315 may be blocked here.
I do realize that these markets are structured differently than the traditional financial markets, and that relationships between these coins change quickly so I am not going to stress over trying to figure out why they are behaving this way.
Here is what I am going to do: Continue to evaluate this market for the next significant reversal upward. I do not expect that kind of price structure at current levels. And since BTC has demonstrated strength, I will look for a significant support level to measure risk from in that market also, but I am NOT going to just jump in and buy. I am highly suspect of this movement and prefer to wait for lows before I take any risk, not highs. Remember the first time it went to 5k? It then retested 3k. What I am curious to see is how ETH reacts during the next BTC correction.
In summary, the BTC move is very interesting, but not attractive in the least bit within the rules of my plan. If I wasn't willing to take risk at lower levels, I am certainly not willing to take any risk at current levels in either market. The fact that the alt coins sold off during this rally presents a mixed market, and mixed markets are ones that I try my best to avoid. Nothing goes up in a straight line, and BTC is no exception. Greed and fear unfold in the same patterns over and over, it is just a matter of waiting until the conditions match the criteria of your trading plan.
I feel a sense of relief knowing that you hold a similar opinion to my own in regards to these less than attractive market conditions. Total market volume is still well below pre China fud levels, Im less than enamored by this transference of wealth between the alts and BTC. More than happy to be 98% in cash atm.
@goldbug1, you're welcome. Glad you find it helpful.
nginx
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Excellent analysis! ETH has broken support and now retesting the $300 resistance. I am not sure whether it will bounce off the 61.8 fib, the usual suspect at $273 like it so often does but that is where I assume the buyers are waiting. Interesting times ahead because the Metropolis HF is nearing and yet ETH is giving mixed signals.
MarcPMarkets
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@nginx, thank you. Yeah it waiting for the fork it seems.
Emusteve
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Hi Marc,
I’m new to crypto, and there is a lot of confusing (and sometimes overly optimistic, it seems) advice out there. Just wanted to let you know that reading your posts has been a big help for me.
Thanks for all you do!
MarcPMarkets
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@Emusteve, glad you find my analysis helpful.Yes you are going to read tons of confusing and often conflicting information. That is why ultimately you want to develop your own perspective.
MoonPickle
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@MarcPMarkets - thanks for this analysis. it is difficult to find a trader with your mindset on this platform. I'm also waiting for the right conditions, as natural market cycles are powerful drivers for trades. Not at all interested in these small-fish BTC trades and alt coin drama