*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
- Litecoin is channeling lower.
- IOTA has broken down from its range.
- Ripple has retraced 78.6% of its entire rally.
- Dash has broken down from its range. Don’t buy.
- Bitcoin Cash has crashed straight to the bottom of its range.
- Trend followers should have gotten out of Ethereum yesterday.
- Don’t buy Bitcoin! It is on the verge of a massive breakdown!
8:20 am. Litecoin is channeling lower.
Litecoin is making lower lows and lower highs. This is a bearish pattern. At the very least, trend followers should wait until Litecoin makes a higher high before buying.
8:18 am. IOTA has broken down from its range.
Trend followers should wait for IOTA to stabilize before buying. Here’s the chart.
8:14 am Ripple has retraced 78.6%
Yesterday I stated that Ripple could retrace 78.6% of its entire rally. I didn’t think it would get there in 1 day.
Ripple has fallen a lot more than other cryptocurrencies simply because it went up much more than other cryptocurrencies in December. Think Ripple is cheap? It could get much cheaper. Ripple was trading at 20 cents just 1 month ago. That’s an 80% drop from where Ripple is right now.
Don’t catch the falling knife. Wait for Ripple to stabilize.
8:12 am. Dash has broken down from its range.
Like other cryptocurrencies, Dash has broken down from its range and is in freefall.
Trend followers should wait until Dash stabilizes.
7:10 am. Bitcoin Cash has crashed straight to the bottom of its range.
Bitcoin Cash actually has 2 ranges: a triangle pattern & a low set on December 22, 2017.
The triangle pattern is more important than the low set on December 22. Bitcoin Cash likes to make a lot of whiskers, so focus on the OPEN and CLOSE.
Do not catch the falling knife in Bitcoin Cash right now. Nobody knows how low it can go.
7:06 am. Longs should have gotten out of Ethereum yesterday.
I recommended that longs get out of Ethereum yesterday when it broke below its 9 ema.
That was a lucky call (I’m not a crypto guru, and nor will I pretend to be one). Ethereum got crushed today.
Trend followers should stay out of Ethereum. Perhaps it will make a big bounce here, or perhaps its crash will continue. Nobody knows (and anybody who tells you otherwise is a fake “expert”).
7:02 am. Don’t buy Bitcoin!
Bitcoin continues to crater. Do not buy the dip, because there is now a >50% chance that this isn’t a dip: it’s the beginning of a crash. Bitcoin has broken below its support trendline. This could the be 3rd down wave of an Elliot wave (i.e. the wave in which Bitcoin crashes).
Catching the falling knife in Bitcoin is EXTREMELY dangerous. Bitcoin might bottom here, or it could crash straight to $6500.
Read Cryptocurrencies on January 16, 2018