Cryptocurrencies on January 13, 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. Other cryptocurrencies are still stuck in a consolidation phase. Trend followers should wait.
  2. Ethereum continues to blast off. Trend followers should stay long.

11:28 am. Other cryptocurrencies are still stuck in a consolidation phase.
Trend followers should wait for a breakout. Do not go long while cryptocurrencies swing sideways because they can swing sideways for months before breaking out (or breaking down).
IOTA is stuck in a very wide range.

Litecoin’s range has become extremely compressed.

Bitcoin’s range is also becoming narrow. Bitcoin is making lower highs and higher lows.

DASH has become compressed into a narrow range. It is now swinging sideways.

11:25 am. Ethereum continues to blast off.
Yesterday I stated that Ethereum’s rally is completely intact. Ethereum is going back up after tagging its 9 ema, which has been good support throughout this entire rally. Trend followers should stay long. A breakdown below its 9ema will be big warning sign that Ethereum’s rally is over.

Trend followers in Ethereum need to be vigilant. One by one, all of the other major cryptocurrencies have gone from rallies to consolidation patterns. Perhaps Ethereum’s run will end soon.

4 comments add yours

  1. Let’s say I have $600 dollars in a trade, market keeps trending up to $700: I take out $100 and lock that up. Now Im back to 600 but market is still trending up -potentially building more profit. Any big disadvantage in doing that? Thanks.

      • Not scaling out but locking up gains, since a trending market like Ethereum right now will reach an ATH then fall back before continuing trend . Ex. I start today at $685, then it goes to $715, then it pulls back to 685 before going to an all new ATH. Why not pull that $30 while still remaining in the trade? Is this compatible with a trend following strategy?

        • That’s essentially the same thing as scaling out as the market goes up.
          This isn’t the same as trend following. Let’s say you get out at $715. What if Ethererum rallies to $800 before making a $50 pullback? You would miss out on a big chunk of the rally.

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