Here and there I have heard lots of people talk about death crosses or any kind of moving average cross and part of this post is just to add one detail to that, and then that will back up the rest of the post.
In the lower chart we can see that the price action has mounted the 13 EMA and is coming upon the 48. The price action is going to get tight and if you threw bollinger bands on the chart you would see the pinch happen. When these moving averages cross with the price action between them you get the powerful and reliable moves. Lots of articles on moving average systems don't mention this particular circumstances. Below is the chart I have been using for bitcoin for a while now, set to 3D and with the 50 and 200 MAs. Steve at CryptoCrew university popularized these settings and it was very predictive. The longer the price action is compressed between these two moving averages, the better.
Below is SLCA, one of my favorite mining companies and something I haven't posted upon yet. The 400 MA and the bearish divergence in the RSI slaughtered the golden cross during a time that the price action was being pinched between the 50 and 200 MA. If your MAs don't have a bullish ordering then you still run the risk of rejection and reversal or a lenthghy consolidation and, if thrown into some of the meta-analysis on golden crosses, would lead to people saying they are not reliable.
So that informed the main chart. My linked posts will show the larger structure we are in, but quickly we see in orange the head and shoulders that got us to the bottom of our falling wedge and against the solid blue line, which is our rising support. The orange neckline of the H&S was support, resistance, and confirmed again as support a few huors ago. I have mentioned I use the 13 and 48 EMAs for my bullish crosses due to some optimization articles I read at ETFHQ. The articles advise using them on the weekly chart and I use them on the daily to 3d on Crypto because those articles didn't include crypto market and it is a personal SWAG.
The golden cross on the 13-48 EMA combo is incoming, we have a lot of structural support the price action, and we have the larger purple falling wedge structure. Given this I think our longer term EMAs, the 200 and 400 especially, will be areas of consolidation where traders could look at taking partial profit, or margin traders could take their orders off and look for continuation structures. There is still a reasonable chance that this rising wedge will break to the downside and if it does the target is about $180, or there is a chance we retest the long term rising support (which, again, is detailed in the linke post). Since this is a forecast there is a chance that the price action does not lead to a bullish cross in the short term and we need another go at it. I have been in unleveraged since about 173 and I have been in and out several leveraged longs, most recently at 178-ish and I am using the trend line from the H&S for my neckline to set my stop losses in case this turns against me, and I have a take profit around the daily 200 EMA. Of course, not advise and all the usual disclaimers apply, I am not your financial adviser and I am not a CMT, I am just a guy that lost a lot of money trying to get good at charting.
In the lower chart we can see that the price action has mounted the 13 EMA and is coming upon the 48. The price action is going to get tight and if you threw bollinger bands on the chart you would see the pinch happen. When these moving averages cross with the price action between them you get the powerful and reliable moves. Lots of articles on moving average systems don't mention this particular circumstances. Below is the chart I have been using for bitcoin for a while now, set to 3D and with the 50 and 200 MAs. Steve at CryptoCrew university popularized these settings and it was very predictive. The longer the price action is compressed between these two moving averages, the better.
So that informed the main chart. My linked posts will show the larger structure we are in, but quickly we see in orange the head and shoulders that got us to the bottom of our falling wedge and against the solid blue line, which is our rising support. The orange neckline of the H&S was support, resistance, and confirmed again as support a few huors ago. I have mentioned I use the 13 and 48 EMAs for my bullish crosses due to some optimization articles I read at ETFHQ. The articles advise using them on the weekly chart and I use them on the daily to 3d on Crypto because those articles didn't include crypto market and it is a personal SWAG.
The golden cross on the 13-48 EMA combo is incoming, we have a lot of structural support the price action, and we have the larger purple falling wedge structure. Given this I think our longer term EMAs, the 200 and 400 especially, will be areas of consolidation where traders could look at taking partial profit, or margin traders could take their orders off and look for continuation structures. There is still a reasonable chance that this rising wedge will break to the downside and if it does the target is about $180, or there is a chance we retest the long term rising support (which, again, is detailed in the linke post). Since this is a forecast there is a chance that the price action does not lead to a bullish cross in the short term and we need another go at it. I have been in unleveraged since about 173 and I have been in and out several leveraged longs, most recently at 178-ish and I am using the trend line from the H&S for my neckline to set my stop losses in case this turns against me, and I have a take profit around the daily 200 EMA. Of course, not advise and all the usual disclaimers apply, I am not your financial adviser and I am not a CMT, I am just a guy that lost a lot of money trying to get good at charting.
Comment:
I am starting to see a lot of things that are making me worry about this ETHUSD trade, and a lot of it is in EHTBTC, so I'll begin there.
We have an uptrend that seems to have come to an end. The 2 and 3 Std. Dev upper limits have acted as strong resistance, as should be expected, and and the indicators have hidden bearish divergence.
When it comes to the margin positions in ETHBTC we have 436k ETH long and only 9k short. This means that a long squeeze is possible here and we could see a lot of ETH being dumped.
Now for the ETHUSD chart proper. Usually a rising wedge is bearish, and popping out the top is a bullish occurrence, and finding support on the top of the wedge would also be bullish. The margin chart shows we have 480k long and 87k short. Once again, a long squeeze is more probable than a short squeeze.
In other words, we have close to 1m eth long on Bitfinex, and not even 100k short. There are about 107M eth in circulating supply and on one exchange we have 1% long. I don't like it.
I am out of ETHUSD, leveraged and unleveraged.
Now for the ETHUSD chart proper. Usually a rising wedge is bearish, and popping out the top is a bullish occurrence, and finding support on the top of the wedge would also be bullish. The margin chart shows we have 480k long and 87k short. Once again, a long squeeze is more probable than a short squeeze.
In other words, we have close to 1m eth long on Bitfinex, and not even 100k short. There are about 107M eth in circulating supply and on one exchange we have 1% long. I don't like it.
I am out of ETHUSD, leveraged and unleveraged.
And I promise every Floridian that you will all be rich... because we're gonna print some more money! Why didn't anybody ever think of this before?
~Nathan Explosion
~Nathan Explosion
We are showing evidence of slowing down where I suspected. I closed my margined position and am holding my non-margined position as I think we will consolidate and power through. I hope to see a continuation pattern develop and play that.