At S.C., we are still waiting for these markets to at least show a structure that represents strength. Even though this price action is , the overall configuration is unfolding as more of a consolidation. 320 defines the range high and needs to be taken out in order to prove this market is stronger than it has been.
Like I wrote in my Litecoin article earlier today for S.C. followers, lagging markets are more vulnerable to a Bitcoin retrace. If BTC pulls back to 6700, this market can easily retest the 260s. If we are wrong, and this market is truly strong, it will prove itself first by closing above 320.
Less experienced traders do not realize that stacking favorable probabilities is worth more than a random signal to buy or sell. We would rather wait until structure favors longs before continuing to add more inventory or participate in swing trades. This means there are occasions when giving up the better prices in favor of a higher probability environment is most appropriate. This market is in one of those situations.
In summary, many often equate short term trading to gambling. One of the key differences is trading is a game where all the rules are defined by the player. And the player can choose to play only when conditions are most favorable. In contrast to casino games, all of the rules are defined by the house and the conditions ALWAYS favor the house.
Ethereum and Litecoin are still presenting unfavorable conditions even though they are pushing higher. They should be taking out their recent high or better as Bitcoin pushes higher, and they are not. This hidden weakness often takes newer traders by surprise because they focus on time frames that are too small and have no sense of context.
At S.C., we do not make up trades especially when the environment does not justify the risk. We will continue to wait on the sidelines until price structure improves. Keep in mind we still maintain inventory in both of these coins and have no intention of selling at these prices. Patience is the most valuable skill a trader can employ and this is a great situation to practice it.