*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
- A bullish sign for cryptocurrencies
2 pm. A bullish sign for cryptocurrencies.
Previously I said that there was something wrong with the rally 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.
That problem is starting to be rectified. Alt-coins are up more than Bitcoin today.
In addition, Bitcoin is holding support on $10k. If this support level holds, that is the first confirmation that Bitcoin is in a new bull market.
Trend followers should not go long yet. Bitcoin’s overall trend is still DOWN. Bitcoin is still making “lower highs and lower lows”. Bitcoin is still stuck at its resistance trendline and 50sma.
A “higher high” above $13,000 would be the first major sign that this is more than a rally in a bear market – it’s a new bull market.
Read more about cryptocurrencies on February 21, 2018.