Cryptocurrencies on February 8, 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. Don’t chase the bounce in Bitcoin, Bitcoin Cash, and Ethereum
  2. Don’t chase the bounce in Dash, IOTA, Litecoin, and Ripple.

3:50 pm. Don’t chase the bounce in Bitcoin, Bitcoin Cash, and Ethereum
Bitcoin, Bitcoin Cash, and Ethereum are firmly stuck in downtrends. They are still making lower highs and lower lows.
At the very least, trend followers should not buy these cryptocurrencies until they make a higher high. Conservative trend followers should wait until these cryptocurrencies make a new all-time high before buying. If they don’t make a new-all time high, then the bubble is over and cryptocurrencies are dead.
Bitcoin’s “higher high” is at $13,000.

Bitcoin Cash’s “higher high” is at $2100

Ethereum is turning prior support into resistance

6:45 am. Don’t chase the bounce in Dash, IOTA, Litecoin, and Ripple.
As a percentage, these cryptocurrencies have made large double-digit bounces. But keep in mind that cryptocurrencies are extremely volatile. A 20% bounce means nothing if cryptocurrency first crashes 60%.
Dash, IOTA, Litecoin, and Ripple are still firmly stuck in downtrends. They have not broken the pattern of lower highs and lower lows. Trend followers should not chase the bounce in crypto.
Dash needs to break above $960 if it wants to make a higher high.

IOTA needs to break above $3.15 to make a “higher high”.

Litecoin needs to break above $215 for a “higher high”.

Ripple needs to break above $1.75 to make a “higher high”.

Aggressive trend followers can go buy cryptocurrencies if they make a higher high. But conservative trend followers should wait until they make a new all-time high before going long. The bubble in cryptocurrencies might be over, so trend following before a new all-time high can be deadly.
Read Cryptocurrencies on February 7, 2018.

2 comments add yours

  1. Hi Troy,
    Thanks for the warning. I did play the Bitcoin bounce off the 200 for 34% gain but sold today to not be greedy. It still is in a down trend as you say.

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