*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
- Don’t catch the falling knife in Bitcoin, Bitcoin Cash, or IOTA.
- Ethereum has been dragged down by other cryptocurrencies.
5:43 am. Don’t catch the falling knife in Bitcoin, Bitcoin Cash, or IOTA.
Bitcoin and other major alt-coins have finally broken down. As expected.
Bitcoin’s next major support is its 200 daily moving average. A lot of traders will go long Bitcoin here.
Bitcoin Cash continues to make lower highs and lower lows. Bearish pattern.
IOTA is already at its 200 daily moving average.
I don’t think trend followers should go long at these 200 daily moving averages. If the bubble in cryptocurrencies is still intact, then this should be the bottom. But if the bubble has burst, then cryptocurrencies will continue to crash. The risk:reward is terrible.
5:39 am. Ethereum has been dragged down by other cryptocurrencies
Yesterday I said
Ethereum is the strongest of the major cryptocurrencies. However, a continued decline in Bitcoin will drag Ethereum down. Don’t buy Ethereum.
Bitcoin continues to break down, and its decline has caused Ethereum to crash. Trend followers should not catch the falling knife. We have no idea where Ethereum will bottom.
Read Cryptocurrencies on February 1, 2018.