Cryptocurrencies on January 27, 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. IOTA has turned previous support into resistance.
  2. Bitcoin Cash is falling in a staircase pattern.
  3. Ethereum is in a triangle consolidation pattern.
  4. Bitcoin’s trend is going down.

11:02 am. IOTA has turned previous support into resistance.
This is a bearish pattern. Trend followers should not buy IOTA right now.

10:58 am. Bitcoin Cash is falling in a staircase pattern.
Bitcoin Cash has fallen, gone flat, fallen, gone flat…
This is a bearish staircase pattern. I expect Bitcoin Cash to make another leg lower if Bitcoin falls below $10k to its 200sma.

10:54 am. Ethereum is in a triangle consolidation pattern.
I think there’s a >50% chance that Ethereum breaks down below this range. If Bitcoin falls to its 200sma, then all the major alt-coins will be dragged down with it. Trend followers should not buy Ethereum right now.

10:50 am. Bitcoin’s trend is going down.

  1. Bitcoin is making lower highs and lower lows. Bearish
  2. Bitcoin has turned previous support at $11,500 – $12,000 into resistance.


Some of the best crypto traders I know think that Bitcoin will fall below $10,000, reach $7500, and then rally. $7500 is Bitcoin’s 200 daily moving average.
Read Cryptocurrencies on January 24, 2018.

3 comments add yours

  1. Would there be indicators of a “rally” (one to buy) if Bitcoin drops to $7500 and then begins a move upward? Or would you stick to your previous advice of waiting to buy until Bitcoin reaches all time highs (>$19,000)?

    • The first sign would be if Bitcoin fell to $7500 and then went above $10k. That could be a false signal though.
      The first real sign would be if Bitcoin made a higher high (i.e. above $12k).
      I don’t have any skin in crypto. But if I did, I wouldn’t buy unless Bitcoin made a new all-time high. The key to success is capital preservation, especially in a bubble. Many people make millions in bubbles and lose all of it when the bubble ends.

  2. Looking at your bitcoin chart, it looks like bitcoin needs to make a 3rd lower high peak above 14,000 as a “bull trap” and then continue its bearish pattern. I don’t trade cryptos as well since 1) I believe it’s an extraordinarily popular delusion with the madness of crowds chasing it 2) it’s the only worldwide currency where u cannot go to a broker and buy a share of common stock! every other worldwide currency you can buy a share of stock with but not bitcoin currency. Which further validates my point of bitcoin being an extraordinary popular delusion.

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