The 118 level was relevant, until price could not mount a meaningful rally and failed to break the . This opens the door to the failed low possibilities which would establish that the selling is drying up and set all of these markets up for a short squeeze. I have been talking about this in recent reports. A short squeeze is no different than when a market reaches its peak and falls apart.
A failed low is basically a fake out. With short interest being up at record levels, the trade is too obvious. Like buying at 20K and confidently expecting 30K, in this situation the herd is shorting or exiting in anticipation of sub 100 prices. Even though all of the technical structures point to lower lows, it is important to consider the possibility of a broad which is easy to lose sight of in situations like this.
The nearest level to watch is the 102 area because it is the reversal zone boundary relative to the recent 109 low. It is also sitting just above the 100 psychological support which can attract buying as well. If price closes below these levels, the 71 reversal zone boundary becomes an increased possibility.
As as this environment looks, I am anticipating the fake out which has not materialized yet. The most conservative action you can take in these markets in my opinion is to wait it out until stability reappears in the form of price structure. This means forfeiting these extreme low prices, and buying after price breaks above 134 and compromises the .
If you would rather capitalize on these attractive prices, then the next best thing to do is accumulate small amounts. Cost averaging makes more sense in these markets if you are not using margin. The small amounts are what protect you in terms of limited exposure if there is a dramatic move. If you get too big too fast, as many often do, you put yourself at the mercy of the market. Do not let greed drive your actions because that makes you no different than the herd.
In summary, picking tops and bottoms is no different than playing the lottery. If you can comprehend that the bottom is a process, you will be better prepared to capitalize on the extreme price moves and reversal patterns that can occur at locations like this. This market is setting up just like BTC , and what makes it more attractive is the low price and high potential. Keep in mind the next major resistance is in the low 200s and can be reached quickly if the huge short interest gets squeezed (they are forced to become buyers by their own fear, or margin liquidation whichever comes first). Participating in such a move has little to do with , and more to do with your ability to embrace risk. The more you can afford to lose, the stronger hand you have.
Questions and comments welcome.
Like other traders are saying here, the entire market is being driven by BTC price movements. And 90% prices are controlled by the exchanges, the remaining 10% going to the pumps and dumps groups and whales.
Charlie Lee said in December:
Unfortunately, the millennials HODL onto the new religion of BITCOIN in the hope and blind faith that their KING will reign once again. I feel sorry for those who had the opportunity to walk away with a fortune, give it all away. Damn sad and upsetting to watch a college kid lose a 7 figure sum on blind faith. I feel for anyone who got burned hoping BTC would reign again. But emotion and misplaced loyalty is no place for investment strategy and risk management. People saw this coming, but the younger crowd didn't listen. Happens all the time. Its a VERY OLD HUMAN story of fear & greed. These markets chew them up and spit them back out. I would question why this this chap promoting Hyperwave, is better over other time proven technical analysis that's not only simple, but has worked for more than 50 years. You would be wiser learning from Mark in position trading and managing inventory over the long term. Because that's why they're still making money when markets turn down. Or, take his sage advise and couple it with what ever other technical analysis be it Fib or Elliot Wave etc. But Hyperwave?????? Stay safe, stay wise, so you can live long and prosper. ;) Apologies for the rant, I'm hoping reason may prevail and carnage avoided. Sincerely.
“What goes up must come down.” -Isaac Newton. . . . . Perhaps you should go and play with hyperwave??? "Hey Brian! I turned the stairs into a waterslide!" - Peter Griffin