Possible short term trade / short squeeze
Updated
Shorts are ramping up again and a squeeze could be in order. Keep in mind this is a counter trend trade so don't expect this to go beyond previous highs.
What I would suggest is look for an entry in the 397 to 414 range and aim for 580 as profit target.
This is a high risk trade.
Other indicators are also looking ready for a squeeze, it could take another 1 to 3 days before there is enough build up selling pressure to squeeze.
-RSI is almost below 30, aiming for 25-26 ish.
- Up trend line is in the 400 area
- MACD bearish
- Buyers have left the space looking at the DMI, needs a bit more selling pressure. It's currently at a 9.1 (green line) and would like to see it at 7.8 or 8.
- Shorts are high.
This is no exact science and lots of selling pressure could send us tumbling through the uptrend line etc, because we are still in a bear trend. So instead of placing limit orders right now and hoping for the best, it probably is a good idea to set an alarm at $432 ETH and look at the price action from there. If you see buyers returning on a smaller timeframe (1H for example) then a swing trade long could be in place. Be careful out there ;)
What I would suggest is look for an entry in the 397 to 414 range and aim for 580 as profit target.
This is a high risk trade.
Other indicators are also looking ready for a squeeze, it could take another 1 to 3 days before there is enough build up selling pressure to squeeze.
-RSI is almost below 30, aiming for 25-26 ish.
- Up trend line is in the 400 area
- MACD bearish
- Buyers have left the space looking at the DMI, needs a bit more selling pressure. It's currently at a 9.1 (green line) and would like to see it at 7.8 or 8.
- Shorts are high.
This is no exact science and lots of selling pressure could send us tumbling through the uptrend line etc, because we are still in a bear trend. So instead of placing limit orders right now and hoping for the best, it probably is a good idea to set an alarm at $432 ETH and look at the price action from there. If you see buyers returning on a smaller timeframe (1H for example) then a swing trade long could be in place. Be careful out there ;)
Note
Note
Above you'll find a pattern which had similar % retrace from the ATH as we've had recently, our higher low could be 20% higher then 360 if we follow this pattern.360*1.2= $432 so that's where I would start looking at the price action. Considering there is high amount of short interest right now I do think this could bring us lower to about $414 as I've stated above. Obviously this will all become invalid if ETH dumps through 400 like there is no support there. Let's wait and see.
Note
Note
It could take a few more days before a bigger drop happens. As long as the bear trend doesn't change, it's only a matter of time. When I see new trading opportunities in the meanwhile I'll let you guys know.Note
My bias has become more bearish because of the price action of BTC. And because BTC could go alot lower, ETH could too. Maybe BTC allows a short term long when it's in the $5800 area where I'll be buying ETH at current market price. ($393 - $420) This is a counter trend trade so be really careful and use a tight stop loss, and not too much volume. If you prefer less risky trades you should pass this one. This trade could easily not come to fuitition at all depending on what BTC has up its sleeve. Until my alarm triggers, I'm not doing anything and let the market do its thing.Note
Unfortunately this trade went by to quick for me to participate. I didn't see good structure before this pumped quite a bit, but try not to get distracted from the bigger picture please. We had a low of $5760 BTC and $420.81 ETH. Was this the bottom? I would guess no. The bears are not satisfied yet. To be honest I would only see this market going beyond previous highs when the large majority of people can agree on the bottom, including the bears. The bears probably won't agree on the bottom at the time we are there, but they can agree once the bull spike followed and we can look back.As a bear, what would be a good bottom for you? Ask yourself, and then raise the price a bit. To be honest 3K would really surprise me and I don't think it is likely. What would be do-able for me is 4100 or so, that would be a 80% correction from our all time high of 20K. This is still considered healthy in crypto.
Moving forward from now, I'll post new ideas when opportunity arives. Don't be surprised by a bullish analysis, the way down is rarely in a straight line ;) Good luck!
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