I had put out previous analysis where we stop on ETH right where we did and we would go down to make fresh lows.
I now think this is wrong.
We are at a point where if we break that above the trend line in the descending channel or descending wedge (however you want to see it), we will get a really strong bounce.
This bounce leads us to a great risk/reward for buying, with a stop loss ~10% down, upside being ~100% (welcome to Crypto, right?)
These are the reasons I am positing for a bounce:
1. Crypto BTC and ETH linked for now to the traditional markets, S&P but mostly Nasdaq
2. Something will cause a bounce in the market in the form of a) lower inflation, b) 2 year yield topping, c) DXY topping, d) chart patterns looking for strong buy signal
2a. Just a point on inflation in the US: Oil dropping fast, shipping container rates back to pre-inflation lows, Fed continuing to increase rates (i.e. demand destruction taking place), commodity prices down, Rents in US seeing first decline since pandemic started
3. Trend lines - there are some powerful levers being pulled where markets maybe have short term bottomed, right at pivot points where break ups will pass trend lines from beginning of FY22
There are other factors taking place, but to sum up, markets can definitely go lower on bad news, but I think for the time being, the risk reward we see today is worth dabbling in.
I would be scared to be short at this point.
I now think this is wrong.
We are at a point where if we break that above the trend line in the descending channel or descending wedge (however you want to see it), we will get a really strong bounce.
This bounce leads us to a great risk/reward for buying, with a stop loss ~10% down, upside being ~100% (welcome to Crypto, right?)
These are the reasons I am positing for a bounce:
1. Crypto BTC and ETH linked for now to the traditional markets, S&P but mostly Nasdaq
2. Something will cause a bounce in the market in the form of a) lower inflation, b) 2 year yield topping, c) DXY topping, d) chart patterns looking for strong buy signal
2a. Just a point on inflation in the US: Oil dropping fast, shipping container rates back to pre-inflation lows, Fed continuing to increase rates (i.e. demand destruction taking place), commodity prices down, Rents in US seeing first decline since pandemic started
3. Trend lines - there are some powerful levers being pulled where markets maybe have short term bottomed, right at pivot points where break ups will pass trend lines from beginning of FY22
There are other factors taking place, but to sum up, markets can definitely go lower on bad news, but I think for the time being, the risk reward we see today is worth dabbling in.
I would be scared to be short at this point.