ETHUSD update: A close below 180 will put the 150 psychological support into focus. Since the short term Bitcoin structure is pointing lower, this bearish scenario is a strong possibility.
At S.C., we promote defense, not forced trades or vague suggestions (and then proceed to take credit for being "right" after the fact). The majority of alts are in a structural bear market according to the process that we use to define such a condition.
Inexperienced traders do not yet have the ability to appreciate defense since their focus is on chasing profits. Imagine for a moment if you were able to go back to your performance record and erase 30 - 40% of your losses. How would that change your record? In effect that is the result of a good defense, which is underappreciated because of its intangibility.
Making a profitable trade is not the biggest obstacle, not giving it back is. This is why being defensive during unfavorable conditions is essential. This is where unpopular words like patience and discipline come into play.
When it comes to Ethereum, it does not matter what our opinions are about the future of its technology. Price structure is bearish and presently poised to go lower. If you look back, you will see that the 180 and 150 levels are the only points of reference for potential support.
So how are we playing defense? First, we play one side of the market. This adds a layer of simplicity that reduces a number of risks, especially exchange intervention risk (see OKex). Second, we avoid any new trades (swing or position) as long as structure is clearly bearish. IF this market decides to construct a longer term recovery, there will be plenty of clues and opportunities to participate.
We still carry inventory. What if we are wrong and this market goes to 0? Since we kept our positions sized relative to our account size, we can handle the loss. That is what allows us to be a strong hand and weather an unfavorable environment.
What happens if the market is surprised by an Ethereum ETF approval? Have fun trying to catch that price spike. It will come out of no where, and we will benefit simply because we are willing to take the risk. Nothing on a chart can prepare you for such a random outcome.
In summary, opposing views are what make a market possible. If everyone was in agreement, there would be no one to take the other side of our trades. Our plan for Ethereum is to sit on what we have until the market provides an opportunity to rotate out of the position and into more attractive candidates according to price structure. We share these specifics with our members. Until then we play defense because we can afford to wait it out.
Kudos to you for a simple and easy to read chart. Once we fell under 200 there is very little historical support at these levels. The next move down will be precipitous and violent because ETH shot through these levels in the past leaving very little in the way of support zones. Any attempt to determine technical support levels are purely speculative and psychological which simply means $100 will most likely be coming before $300. Fear is a terrible thing and there are still longs holding as high as 400+ dollars (USD) and will no doubt be scared away when volume continues to dry up and the sellers speed up and people like me look for value at the 20-25 dollar level. This bloodbath has taken a toll on no less than half the investors who speculate in this space, scared away another half who thought they would make big money like their friend "Bob", and put people like me on VALUE watch. Even though how can you value the valueless? I still maintain that ETH grew too fast, too soon, and is dying under that weight of all the ERC-20 tokens running on its platform bogging down the BC. I have recommended in my previous posts that a volume profile chart will better explain the reason why the next drop (if it comes to fruition) will be violent. We can only hope the buyers are standing ready to recover it and that new blood from the sidelines are willing to support ETH. But by continually making new higher lows is a trend and one that has yet to be broken.
Advice to all: when you see those long tails on these candles probing downward and no change in trend upwards, you can bet that the bears are poking at both the psychology and will of the longs. Who will blink first? So far the longs have been blinking at every critical support level! Good luck to the Longs and great job to the Bears. $370 was the straw that broke these camels back.
Kool_Keith
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@biffbifford, LOL, you'll be waiting for $20 ETH forever.
Advice to all: when you see those long tails on these candles probing downward and no change in trend upwards, you can bet that the bears are poking at both the psychology and will of the longs. Who will blink first? So far the longs have been blinking at every critical support level! Good luck to the Longs and great job to the Bears. $370 was the straw that broke these camels back.