why i'm taking substantial profits at $5.3k
Updated
these are the big-picture decisions that will make you or break you in this market.
a couple of months ago, i plotted the path to 5.3k and explained why i planned to take profits at that level. the price action since then has me convinced that taking substantial profits at 5.3k is a must. price has now developed a rising wedge.... inside of a rising wedge... inside of a rising wedge. and these wedges are converging on our 5.3k target (where 2x long liquidations are no longer protected by the 2.65k support).
however, it's important to note that a rising wedge doesn't necessarily imply a break to the downside, and a drop-off in 2x long pressure doesn't necessarily imply a top. i do still think a blow-off top is likely for the crypto market, and if that happens, we'll see ETH prices well above 5.3k. we did see a similar rising-wedge-like consolidation back in 2017 which ultimately broke hard to the upside:
while taking profits at $5.3 could potentially be costly in a blow-off top scenario, i'm not getting caught with my pants down if that scenario doesn't play out again. this is a game of probability, and i always try to hedge against all possibilities accordingly. remember, it's a long way down to the bottom when the bear market inevitably comes, and ETH will likely see a larger drop than BTC:
a couple of months ago, i plotted the path to 5.3k and explained why i planned to take profits at that level. the price action since then has me convinced that taking substantial profits at 5.3k is a must. price has now developed a rising wedge.... inside of a rising wedge... inside of a rising wedge. and these wedges are converging on our 5.3k target (where 2x long liquidations are no longer protected by the 2.65k support).
however, it's important to note that a rising wedge doesn't necessarily imply a break to the downside, and a drop-off in 2x long pressure doesn't necessarily imply a top. i do still think a blow-off top is likely for the crypto market, and if that happens, we'll see ETH prices well above 5.3k. we did see a similar rising-wedge-like consolidation back in 2017 which ultimately broke hard to the upside:
while taking profits at $5.3 could potentially be costly in a blow-off top scenario, i'm not getting caught with my pants down if that scenario doesn't play out again. this is a game of probability, and i always try to hedge against all possibilities accordingly. remember, it's a long way down to the bottom when the bear market inevitably comes, and ETH will likely see a larger drop than BTC:
Note
also for the record, i do still see ETH gaining some more ground against BTC. so while i'm going to be taking profits on ETH at 5.3k, i'm going to continue to allocate a larger percentage of my portfolio to ETH:Note
Note
really hard to ignore the similarities from 2017:Note
for the record, i think the premature breakdown from the wedge invalidates this idea. i do still think 5.3k is a valid target, but i'm no longer expecting as big of a correction when we hit it, now that prices have already broken down and tested support. seems counterintuitive, but i think this recent price action actually reduces the probability of 5.3k being a potential cycle top. 
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