ETHUSD: New Low? Don't Overlook One Important Clue.

ETHUSD update: Bearish momentum revisits the 270s and points to the possibility of a new low. When viewed through the lens of BTC, the not so obvious argument for a failed low shines through. This conflict offers clues about the hidden strength of this market and in our opinion not a good idea to short.

I published an article earlier on S.C. that goes into more detail on the structural conflict between the two markets. This reason alone is enough for us to avoid Ethereum and Litecoin until they can prove the return of more stable price action.

While many are focused on oscillators and trend following, they lose sight of the fact that BTC rules these markets. And even though it looks unattractive at the moment, it is still not making new lows. All while short interest is pushing highs.

If BTC holds and establishes a higher low, ETH is likely to follow. That means shorting into this low is a likely bear trap. This is why it is important to always look beyond the obvious when it comes to chart analysis.

At S.C., we are carrying inventory and a swing trade long in BTC. If there is a recovery, it will begin there first, especially since it has the most attractive structure and lower risk compared to the alts.

In summary, the crowd chases profits which is usually the path to more losses. High probability opportunities are infrequent and require a great deal of patience to recognize.

If the crowd is impulsive and impatient, then being the opposite is more likely to prove fruitful. Patience is the first step toward anticipating or letting the market come to you.

Everyone is quick to react to the obvious which in this market is to go short. Meanwhile their restlessness prevents them from seeing a subtle but important sign which is that Bitcoin is not pushing lows. And where ever Bitcoin goes, Ethereum is likely to follow along.

Ethereum may not be in the best position for a long, but it is also in an unattractive location for a short. Whenever this kind of conflict ensues, the best choice is the stay on the sidelines and let the market work it out. True opportunity is lost when your account is wiped out from forced trades, not waiting for the most favorable setups.