Long

ETH (and Really Most Big Coins) are About to Moon

Updated

Step back for a second. Look at the bigger picture. We are sitting on a key support level with longstanding bull divergences in a number of key indicators and some pretty big hints about what the bigger players have in mind if you start looking through various Bitfinex longs and shorts.

These days, I think people ought to strongly consider pairing their BTC analysis with a cross-check of the ETH chart. The ETH chart is just a little bit more honest about what's going on - heavily correlated, but without quite so many artifacts compliments of Bart Simpson. It's a different angle on the same overall story, with different indicators and analyses being clearer on either BTC or ETH.

6 month CME futures closed at the end of June. The next two sets of 6mo futures (September and December expirations) opened near the lows of April and July. So, if like me, you only really trust analysis in crypto that comes with a healthy dose of cynicism about how and why the gears turn the way they do, that's your clue about where the rest of the year is headed.

The next bullish move starts very very soon.

I'm an amateur and you definitely shouldn't take anything I say as financial advice. I'd be interested in any feedback.

Note

It begins!

Note

The run has started, but interestingly, ETH did substantially worse than BTC on today's leg.

Check ETHBTCSHORTS though... and 37% of them (8k BTC worth) just closed on this dip:

This kind of thing has telegraphed big moves coming in individual alts before. If a bunch of shorts close in retail-sized increments, then that means one thing. When 8000 BTC worth of shorts close at the same time after an unexpected bottom, that means something very different.

Note

This might be the entry of the summer. Certainly, R:R is great because there's an easy tight stop. ETHBTC looks like it's breaking upwards here. It has a long-term support/resistance level at 0.054 that is suspiciously close but it's been stubbornly refusing to dive to so far

My approach is telling me that breaking up now means ETH could get the entire BTC rally it missed out on over the past two weeks as ETHBTC retraces, plus the sum of any additional BTC rallies, and quickly. That is not a small projection especially since ETHBTC lost ~20% in 2 weeks that it can retrace and I think BTC is still going up further versus USD.

Assuming BTC rallies further and ETHBTC retraces, that projects actual insanity like $1000 ETH in mere weeks playing out. This would be an actual Moon mission and I don't quite believe it should be possible myself, but then again, that's basically what happened in April - 130% in about 3 weeks.

Maybe it gets a just a piece of the past 2 weeks as ETHBTC only partially retraces. Still, it can do pretty much any fraction, including pessimistically staying in the relatively flat channel that it's been in for July, and it's still a easy to draw a 3:1 R:R entry because you know to stop out if it breaks down pretty much at all.

Maybe ETHBTC makes that dive as soon as I post this. That would be a pretty hilarious blown call. It may still work out fine on the ETHUSD pair if BTCUSD rallies and/or ETHUSD rallies but weeks from now instead of now.

This is the point where I strongly remind people: I'm an amateur and you definitely shouldn't take anything I say as financial advice. I could be very wrong. This kind of call on the internet should be treated with heavy suspicion no matter who says it, much less some amateur on TradingView.

Note

So this got interesting in all the wrong ways very quickly.

We ended up diving to 0.0545 on ETHBTC as BTCUSD retraced, dumping ETHUSD down to ~410. This means we're now testing a triple bottom at the bottom of the channel along with June 29 (405) and July 13 (415). ETHBTC appears to be consolidating in a symmetrical triangle outside of the dive channel it has exited:

Triple bottoms are bullish - if it holds.

While it's clear now that my call for the next ETH bull run was at the very least early, I'm still bullish on ETHUSD because, despite getting some cuts from this slippery knife, it hasn't actually invalidated the scenario yet. I'm seeing 2 paths to invalidation:

(1) ETHUSD does not hold the triple bottom. Drop any further and we lose our bullish setup.

(2) ETHBTC symmetrical triangle breaks down and does not immediately bounce on ~0.054. ETH isn't about to imminently start outperforming if it's losing its main long-run support/resistance.

Note

Looks like this will happen in the next 12-18 hours.

It's perhaps asking too much to get the 100% clean perfect wick, but it's possible. That log line is strikingly exact. Obviously breaking this structure down would seem to be a disaster for ETH.

Yesterday, BitMEX announced ETHUSD perpetual swaps at up to 50x leverage (still bought and settled in BTC like their other contracts), which seems to have gotten little fanfare so far. Doesn't seem like coincidental timing for a big new derivative market to be opening for ETH when there's an apparent imminent bottom. New derivatives, broadly speaking, incentivize bull runs followed by retracements, so that's a potential new mechanism to fuel a run.

Note

We saw a dive on ETHUSD to 398, which is to say that we dodged invalidation by the skin of our teeth. We're not, however, currently getting a dramatic bounce so much as a rally.

If we start picking up some steam, call for ETH and alt moon is still valid. There's an increasing probability though that we see alt/BTC pairs get some ground back while BTC retraces, meaning that the alt/USD pairs end up being lackluster too. BTC market dominance is at its high for 2018 and has appeared to switch direction for about 3 months at a time.

What changed from just a week ago when I was decidedly more bullish in tone? Well, we lost some time, slid further versus BTC, and the BTC rally showed its first real weakness in weeks. It's a heavily lift and a less bullish background.

Here's what would be really, really bullish: both alts and BTC breaking upwards together as BTC breaks well into at least the 8000s. At that point, we could say that the total crypto market is breaking resistances relative to fiat, rather having a battle royale for the same pool of market cap.

Note

I'm noticing several different TAs that I respect calling for a move up on ETH soon for independent reasons.

I, of course, agree. I'm pretty sure I was early but not wrong, and now there's stuff like a massive 4h RSI bull divergence opening up on the 4h chart and nearly all of ETHUSDSHORTS opened on this dive back to a triple bottom have now been closed. The BTC D chart had 7 red candles in a row and in the meantime ETH went to its double bottom region to make a triple bottom and then start reversing on ETHBTC.

ETHUSD is still "cheap" - whereas BTC is oscillating around 7000 after bottoming at 5800 at end of June, ETH is oscillating between 400-420 after bottoming at 405, 417, and 398 over the past month and a half. ETHBTC hit a long run support at 0.054 and if it keeps climbing has until about 0.065 to run before it first revisits a downtrend line. I think then we're staring at two likely bullish scenarios now for August:

(A) A bullish breakout August across crypto, where ETH is finally going to get its run where it gets the upside of BTC plus makes back what it missed out on in the ETHBTC drop.

(B) An anemic August across crypto, where ETH and other major alts get a nice little rally at first before everything starts falling apart as resistances on USD pairs get tested again. We would probably see this reversal of fortunes in the middle of the month.

I don't expect ETH to lose its support at this point and would run for the exits if that happened. If it does, it now means a bullish breakout has been rejected 4+ times and in defiance of multiple TA approaches, and probably means a broader capitulation dive for alts, and possibly BTC too, is in play.

Note

Well, this call blew up. We got the broader capitulation.

MFI did an excellent job on the 4h TF on ETH for months until pretty much exactly this dump. We now have both a daily MFI buy signal that started at about 350, more than 15% above the bottom with MFI reaching down to 3, and have triggered an MFI buy signal on the weekly.

Looking over various methods of quantifying volatility such as BBands and VWAP-derived volatility, we basically fell off a cliff, and not only that, but we fell off a cliff far faster than recent volatility would have predicted should be reasonable. I had to go back to 2016 to find a daily candle that traded this far away from VWAP - and this was in a market with single digit ETH prices on a day with a V-bottom and a bounce. There's RSI bull divergences on the D and the W.

It's a harsh lesson in why stops and risk management is important - sometimes the improbable happens, and trades have a time dimension so being early is often not any better than being outright wrong. The trade was actually pretty great for the first week or so and would stop out for a nice profit, and then alts went into freefall against BTC. At that point, everything about this call and the follow-ups other than perhaps where the stops should be got destroyed.

Given the extreme drop and oversold signal on the weekly chart, there's a likely good long-term buy on ETH in this region, but we could end up spending awhile figuring out the exact level of that buy. ETH ranged between ~280-315 for much of late 2017, so we're now at a level of real support. That buy may be now, though that probably depends on if BTC is about to take the plunge that major alts did.

I think I'll leave this idea at with this as the post-mortem. I had a good entry that did catch a nice 20%ish run, but then the broader breakout failed spectacularly (and I badly missed that this was going to dump on that rejection in my follow-ups).

acatwithcharts

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