*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 chase the bounce in Bitcoin, Bitcoin Cash, and Ethereum
1:30 pm. Don’t chase the bounce in Bitcoin, Bitcoin Cash, and Ethereum
Bitcoin and other alt-coins bounced today, reclaiming its 200 daily moving average. (A lot of contrarian traders went long at Bitcoin’s 200 daily moving average). This bounce is still small despite today’s bounce size (in percentage terms). Bitcoin did not even retrace 23.6% of is decline.
Here’s Bitcoin on a log scale.
Here’s Ethereum on a log scale.
Here’s Bitcoin Cash on a log scale.
Bitcoin and other cryptocurrencies are completely stuck in a pattern of lower highs and lower lows. The downtrend is completely intact. Trend followers should not chase the bounce in crypto.
Some of the best contrarian traders I know expect Bitcoin to retrace 38.2% right now. This is approximately a target of $11,300.
Read Cryptocurrencies on February 6, 2018.