Cryptocurrencies on January 8, 2018: outlook

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

Discretionary outlook based on charts

  1. IOTA is stuck in a massive range.
  2. Dash’s range has become very narrow.
  3. Bitcoin Cash’s range continues to narrow
  4. Ethereum is retesting support. It’s uptrend is intact.
  5. Trend followers need to be careful with Ripple.
  6. Bitcoin is going to have a MASSIVE movement very soon.

2:53 pm. IOTA is stuck in a massive range.
Trend followers have no advantage in this market. This is a contrarian day trader‘s market. However, the next move (breakout) will be a big one.

2:45 pm. Dash’s range has become very narrow.
Dash’s chart looks very similar to Bitcoin Cash’s chart. Its range has become extremely narrow, which means that the next breakout/breakdown will be a big one. Neither bulls nor bears have an advantage here.

2:16 pm. Bitcoin Cash’s range is very narrow
Bitcoin Cash is now trading within an extremely narrow range. Expect a massive breakout or breakdown soon. The best course of action is to wait for the next movement. Trend followers should stay in cash.

10:42 am. Ethereum is retesting support
$1000 was a big resistance for Ethereum that many traders were watching. It has now broken above this resistance and is turning it into support. The uptrend is still intact.

10:27 am. Be careful with Ripple
It looks like Ripple’s strong uptrend may be over, and might be entering into a consolidation phase. Trend followers with tight moving stop losses should consider getting out. A close below its 9 ema is something that Ripple has never done before in this uptrend.

6:32 am. Bitcoin’s next move will be yuuuuuge.
I said that trend followers shouldn’t be too eager to jump into Bitcoin. They should wait until Bitcoin breaks above $20k.

There is a solid fundamental reason for this. Zerohedge states that some traders are building huge short positions against Bitcoin. No matter what happens, the next movement in Bitcoin will be huge. Either:

  1. Bitcoin will break above $20k, animal spirits will be reignited and all these shorts will be forced to cover their positions. The short covering alone will spark a massive rally.
  2. Bitcoin will break down below $10,000, and all the small mom-and-pop traders who quit their day jobs to trade crypto will dump their Bitcoin in a hurry. This will kill the Bitcoin bubble.

When a market crashes 50%, makes a 61.8% bounce, and then makes a new low, the bubble is over. Everyone hits the exit gate at the same time. You can see that Bitcoin’s previous “corrections” did not make a new low.

So either these Bitcoin shorts are very right (i.e. a massive crash is ahead), or they are very wrong and will be forced to short cover. Prudent trend followers should wait for the breakout/breakdown.

6 comments add yours

  1. I know you are not in crypto, but would it be wise to get out of crypto until bitcoin made its huge move and then get in again?

    • It depends on whether you’re sitting on a large profit or loss I think. I don’t really want to give specific trading advice for crypto because I don’t trade.
      But if I had a large profit, I would take that profit and wait for a breakout. Some of the best cryptoI know think there’s a 50% chance Bitcoin will fall below $10k

  2. >and all the small mom-and-pop traders who quit their day jobs to trade crypto will dump their Bitcoin in a hurry.
    i’m dying

    • You’d be surprised at the number of people who quit their jobs to trade crypto. It’s like a mini-version of the dot-com bubble.

  3. If you know about some ICOs , could you pls shed some insight Troy ?It is very hard to assess those ICOs but I believe there are some genuine and good projects out there .

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