Coinciding Variables - ETH End of Year Swing Trade
Updated
There are quite a few reasons leading me to expect considerable appreciation on Ethereum around the end of the year/beginning of 2021.
Bitcoin has just made its next leg up above $13,000. At time of writing (3:47 UTC) it is trading just below $13,300. I'm expecting it to reverse to the downside around $13,600 (from more TA I haven't written about) If Bitcoin is to get rejected around these levels then it will likely retrace a bit and then trade sideways for a period of time, the perfect environment for capital to move into alt coins.
Every single year since its inception, Ethereum/USD has had a significant swing low around the end of November/start of December and then a swing high in January. These have ranged from the smallest move, at 55%, to the largest move at 253%. Regardless of returns on them, four consecutive years of extremely similar behavior would make me expect a similar move this time as well. On top of that, there's a number of other technical analysis reasons to expect a pump...
Beginning with the ETH/BTC daily chart, ETH is clearly in a bullish falling wedge. On top of that, there is hidden bullish divergence on the July swing low to the September swing low on the RSI. There is also standard bullish divergence on the MACD from the swing lows in September to the swing lows in October.
Moving on to the USD chart, we have just broken above the most significant line of resistance on the ETH lifetime chart. We then successfully backtested this level and are pushing up. This is a "break, hook, and go" pattern and is one of the most reliable patterns there are. On top of that, we had a very nice double bottom - very strong signal for upwards price action to have such a clear pattern on such a massive time scale.
Simple chart here - very nice rounding bottom action of the USD chart.
Here you have the 100 day MA and the 50 day MA. It looks like we've got a successful bounce off of both the moving averages, with price looking to push up and the 50 day MA curving back up, looking like it will avoid pushing lower for a death cross.
We also have a very nice double bottom that formed in September. One could also argue that there is bullish divergence on the daily if you draw from the candle closes.
I'm holding this for a multi-month trade. The reason why I'm excited about the opportunity in this is the lack of resistance looking up. We have a strong chance of breaking through if we push up to test the high 400s again. After that, there is meager resistance at $562 and then there is nothing until the high 700s. This is looking like a rare opportunity on the only other real "blue chip" coin after Bitcoin.
Let me know what you think:)
Bitcoin has just made its next leg up above $13,000. At time of writing (3:47 UTC) it is trading just below $13,300. I'm expecting it to reverse to the downside around $13,600 (from more TA I haven't written about) If Bitcoin is to get rejected around these levels then it will likely retrace a bit and then trade sideways for a period of time, the perfect environment for capital to move into alt coins.
Every single year since its inception, Ethereum/USD has had a significant swing low around the end of November/start of December and then a swing high in January. These have ranged from the smallest move, at 55%, to the largest move at 253%. Regardless of returns on them, four consecutive years of extremely similar behavior would make me expect a similar move this time as well. On top of that, there's a number of other technical analysis reasons to expect a pump...
Beginning with the ETH/BTC daily chart, ETH is clearly in a bullish falling wedge. On top of that, there is hidden bullish divergence on the July swing low to the September swing low on the RSI. There is also standard bullish divergence on the MACD from the swing lows in September to the swing lows in October.
Moving on to the USD chart, we have just broken above the most significant line of resistance on the ETH lifetime chart. We then successfully backtested this level and are pushing up. This is a "break, hook, and go" pattern and is one of the most reliable patterns there are. On top of that, we had a very nice double bottom - very strong signal for upwards price action to have such a clear pattern on such a massive time scale.
Simple chart here - very nice rounding bottom action of the USD chart.
Here you have the 100 day MA and the 50 day MA. It looks like we've got a successful bounce off of both the moving averages, with price looking to push up and the 50 day MA curving back up, looking like it will avoid pushing lower for a death cross.
We also have a very nice double bottom that formed in September. One could also argue that there is bullish divergence on the daily if you draw from the candle closes.
I'm holding this for a multi-month trade. The reason why I'm excited about the opportunity in this is the lack of resistance looking up. We have a strong chance of breaking through if we push up to test the high 400s again. After that, there is meager resistance at $562 and then there is nothing until the high 700s. This is looking like a rare opportunity on the only other real "blue chip" coin after Bitcoin.
Let me know what you think:)
Comment
Unfortunately we broke down out of the falling wedge of ETHBTC, however, this was mainly due to the large increase in BTCUSD, rather than a big decrease in ETHUSD (which would be more bearish).
Right now is looking like a solid "buy the dip" opportunity, as we've not only retraced to the .786 fibonacci level of the swing low to swing high (on the pump we had over the summer), but that fib level lines up EXACTLY with the (very crucial) level of support at 0.0284.
Please keep in mind that I see this as a multi-month swing trade opportunity. I'm not trying to predict short term price movements here.
Comment
ETHBTC did end up reversing around the area of support that I anticipated. Yesterday it was more oversold than it has been at any time this year and has since bounced up. ETHUSD currently trading in a diamond formation and testing a breakout to the upside. I can't determine short term price action, but I'm still quite confident in its potential price action heading into the EOY.
Comment
Bitcoin showed even more strength than I expected, pushing up above
14K at one point and nearly setting the highest monthly close in Bitcoin's history. However, it does look likely to now be reversing. It's not only facing the historically significant level of 14K, but it looks to be failing to break above this key level of the fib channel that it was in. With the buy side strength it's shown though I expect that we have a shot at trading sideways which would likely allow for capital to flow into alt coins (like ETH).Comment
ETHUSD broke upwards out of the diamond as expected. I'm waiting to add to my position after we've confirmed a successful backtest of the breakout.
Comment
Another thing to note is that I'm being careful with all of my current crypto positions given that the election is in two days. I of course can't say whether the move will be to the upside or downside, but the election is sure to bring volatility.
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