*I don’t trade cryptocurrencies. The best strategy for trading a crypto bubble is a classic trend following strategy.
Here’s the outlook for various cryptocurrencies based on the aforementioned strategy.
Discretionary outlook based on charts
- Litecoin has broken out from its wedge, but trend followers should wait.
- Bitcoin Cash’s range is extremely narrow. This is only suitable for day traders.
- Bitcoin is making higher lows.
- Ethereum’s rally is strong and momentum is intact.
- Trend followers definitely need to get out of Ripple.
12:58 pm. Litecoin has broken out from its wedge, but trend followers should wait.
Trend follower should wait until Litecoin makes a new all time high. Some of the best crypto traders think that Bitcoin will break below $10k. If that happens, Bitcoin’s crash will bring the entire crypto market down.
12:52 pm. Bitcoin Cash’s range has become extremely narrow.
Bitcoin Cash’s range has become extremely narrow. This means that aside from day traders, neither longs nor shorts have an edge here. Trend followers should wait for a breakout before going long.
7:56 am. Bitcoin is making higher lows.
After making a 50% “correction” (because crypto is insanely volatile), Bitcoin is slowly starting to making higher lows and higher highs.
Some of the best traders I know think that Bitcoin will breakdown below $10k. I don’t know. That’s why trend followers should wait for the next breakout/breakdown, which will be huge. If Bitcoin breaks above $20k, then it will soar.
7:53 am. Ethereum’s trend is completely intact.
Trend followers should stay in Ethereum with a tight moving stop loss. Nobody knows how far a bubble can go, which is why there’s no point in trying to pick a top. Traders who got out at $1000 just missed a 20% gain.
7:48 am. Trend followers need to get out of Ripple.
Yesterday I wrote
It looks like Ripple’s strong uptrend may be over, and might be entering into a consolidation phase. Trend followers with tight moving stop losses should consider getting out. A close below its 9 ema is something that Ripple has never done before in this uptrend.
Ripple has officially broken below its 9 ema. Its insanely high momentum is breaking down. The classic trend following strategy states that crypto traders should go long strong cryptocurrencies and get rid of weak ones.
Now is the time to get out of Ripple. It looks increasingly likely that Ripple has entered into a consolidation phase. This consolidation phase can last for weeks/months.