Cryptocurrencies on April 23, 2018: outlook


*I don’t trade cryptocurrencies. The best strategy for trading a crypto bubble is a classic trend following strategy.
Here’s my outlook for various cryptocurrencies based on the aforementioned strategy.

Discretionary outlook based on charts

  1. Bitcoin has broken above its 50sma. Next resistance at $10k.
  2. Ethereum is at $640 resistance.
  3. Bitcoin Cash has broken out from its 100sma. Next resistance at $1600 (previous high).
  4. Ripple is one of the weakest major alt-coins.
  5. Litecoin is also one of the weaker cryptocurrencies.

1 am: Bitcoin has broken above its 50 daily moving average. Next resistance is at 10k.
I said on Friday morning that if Bitcoin broke above its 50 daily moving average, its next resistance would be $10k. It has broken above the 50sma.
There are multiple prior supports and resistances at $10k, not to mention the fact that $10k is a round # resistance.

1 am: Ethereum is at $640 resistance.
As expected, Ethereum has entered into a resistance range fro $640 to $700 (there were prior supports here). I think Ethereum will at least make a short term pullback from this resistance range.

1 am: Bitcoin Cash has broken out from its 100sma. Next resistance at $1600 (previous high).
On Friday I expected that Bitcoin Cash’s rally would halt at its 100 daily moving average. I was wrong. Bitcoin Cash has broken above this resistance.

The next resistance is at $1600, which conforms to Bitcoin Cash’s “lower highs” bearish pattern. If Bitcoin Cash breaks above $1600, then the bear market pattern of “lower highs” is clearly starting to change. Cryptocurrencies could be entering into a new bull market. But for the time being I am maintaining my long term bearish outlook.
1 am: Ripple is one of the weakest major alt-coins
Ripple broke out above its 50 daily moving average last week, just like the majority of alt-coins. But unlike Bitcoin, Ethereum, and Bitcoin Cash, Ripple has not continued to rally. Its price action is weaker than other major cryptocurrencies. I expected Ripple to approach its $1.1 resistance, but it clearly hasn’t.
Remember, long traders should always go long the cryptocurrency with the strongest price action. Short traders should always go short the cryptocurrency with the weakest price action.

1 am: Litecoin is also one of the weaker cryptocurrencies
Like Ripple, Litecoin is unable to really breakout from its 50 daily moving average. Its price action is weaker than that of Bitcoin, Ethereum, and Bitcoin Cash.

Read Cryptocurrencies on April 20, 2018: outlook

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