Over the last couple days I have been calling for a reversion to the mean. I expected to see days of consolidation or a quick bounce back to the 12 & 26 day EMA’s on the daily chart.
In yesterday’s post I outlined 4 potential entries. Two have yet to come to fruition (short BTC after bounce or consolidation) and the other two are already well into the money (short ETH & LTC against BTC).
I also mentioned the bear flag (blue lines) but said that I didn't think it would be able to complete right away due to being oversold at support.
I did not expect us to break down below the 4/1 low of $6,432 before retesting the EMA’s. As it turns out the bearish momentum has carried us right through the trend support (red dotted) and any horizontal support that might have been expected from the prior swing low.
Now I am watching a nice capitulation wick forming on the current candle that could turn into a hammer or a dragonfly. Those candles are my best indicator of an upcoming bounce. However there is still over an hour left before the close. If it closes below $6,200 then I would expect us to continue downward for a retest of the February 6th low at $5,964. That also happens to be the target for the bear flag from yesterday. If it closes above $6,200 then a short term reversal is likely.
If we do not get a bounce off of the capitulation wick that is forming then I expect it to come from an A-B-C-D three drive pattern that bottoms at $5,964. I will not be buying that, nor will I be covering my short. I will simply be planning for a natural flow of price movement and doing my best to be prepared.
I firmly believe that a short term bottom lies somewhere in the range of $5,964 - $6,123. From there I expect to see a 1-7 day rally that retests the short term daily EMA’s (12 & 26). If not currently in a trade then I strongly advise against opening a bearish position right now. Wait for the bounce, and/or multiple days of consolidation.
I am still holding onto my ETH:USD short positions from $583 - $607 and still feel good about my profit target of $300 - $350. I am also short ETH:BTC from 0.074 - 0.07847 and will plan on holding onto that for a while with a trailing stop.
Thank you for reading! Comment if you have something to say! Follow if you found this helpful and remember that clicking like is good karma!
In yesterday’s post I outlined 4 potential entries. Two have yet to come to fruition (short BTC after bounce or consolidation) and the other two are already well into the money (short ETH & LTC against BTC).
I also mentioned the bear flag (blue lines) but said that I didn't think it would be able to complete right away due to being oversold at support.
I did not expect us to break down below the 4/1 low of $6,432 before retesting the EMA’s. As it turns out the bearish momentum has carried us right through the trend support (red dotted) and any horizontal support that might have been expected from the prior swing low.
Now I am watching a nice capitulation wick forming on the current candle that could turn into a hammer or a dragonfly. Those candles are my best indicator of an upcoming bounce. However there is still over an hour left before the close. If it closes below $6,200 then I would expect us to continue downward for a retest of the February 6th low at $5,964. That also happens to be the target for the bear flag from yesterday. If it closes above $6,200 then a short term reversal is likely.
If we do not get a bounce off of the capitulation wick that is forming then I expect it to come from an A-B-C-D three drive pattern that bottoms at $5,964. I will not be buying that, nor will I be covering my short. I will simply be planning for a natural flow of price movement and doing my best to be prepared.
I firmly believe that a short term bottom lies somewhere in the range of $5,964 - $6,123. From there I expect to see a 1-7 day rally that retests the short term daily EMA’s (12 & 26). If not currently in a trade then I strongly advise against opening a bearish position right now. Wait for the bounce, and/or multiple days of consolidation.
I am still holding onto my ETH:USD short positions from $583 - $607 and still feel good about my profit target of $300 - $350. I am also short ETH:BTC from 0.074 - 0.07847 and will plan on holding onto that for a while with a trailing stop.
Thank you for reading! Comment if you have something to say! Follow if you found this helpful and remember that clicking like is good karma!
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