*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
- There’s something wrong with this bounce in cryptocurrencies
4:08 pm. There’s something wrong with this bounce in cryptocurrencies.
This does not look like the start of a new bull market in crypto. This looks more like a bear market rally. Bitcoin is like the Dow Jones while alt-coins (Ethereum, Bitcoin Cash, IOTA, Ripple) are like the NASDAQ. In a normal bull market, the new upcoming players (alt-coin) should outperform the old industry standard (Bitcoin). Smaller markets (alt-coins) are more volatile than larger markets (Bitcoin), so alt-coins should outperform Bitcoin in a real bull market.
Cryptocurrencies are up today. But Bitcoin is up a lot more than the other major alt-coins.
Bitcoin is still stuck at its 38.2% retracement. 38.2%-50% retracements are very common for rallies within bear markets.
Most of the major alt-coins have retraced 38.2% or less, which is normal for a bear market rally.
Bitcoin Cash only retraced 23.6%
Litecoin retraced 38.2%
Ripple only retraced 23.6%
IOTA retraced less than 23.6%
IOTA retraced a little more than 23.6%
The bearish case for cryptocurrencies would start to be invalidated if they make “higher highs”. Cryptocurrencies are still making “lower highs and lower lows”, which is normal for a bear market.
Read more about cryptocurrencies on February 18, 2018.