“Shakeout” has been the definitive word for the last couple of weeks as markets have tested everyone’s resolve, especially those who have recently entered crypto. Is this going to continue? Are we going to see a continuation of this sideways correction with more scary selling? It’s one possibility, of course.
On the other hand, we could just as well explode higher if the lower channel boundary seen on the chart below holds. Without a doubt, that would be the most desired of possible scenarios. Market structure is also pointing to that eventuality, with the whole setup pointing to much higher prices.
In short, it looks to me like we’re at a crossroads, and quickly running out of room on the right hand side of the chart to further correct within the uptrend. Either we break higher, or we get more of the same, or worse, perhaps with things getting even scarier.
And if we break lower, you could just sell the break and buy back later, or could you?
Too bad things are never that straightforward though as sometimes we get a nasty head fake in the opposite direction before continuing the trend. A bear trap is the worst possible scenario since you get shaken out right before the market rockets higher. Maybe we already saw one last Thursday, but it’s a good idea to be aware of the possibility anyway – there’s nothing that says it can’t happen again, and this is where they are prone to happen.
Being aware of the possibilities, and mentally prepared to withstand the pain of a break lower that has a high probability of reversing higher again is extremely important in order to avoid getting turned upside down and losing money.
Since the longer term time frames are still very bullish – as are the underlying macro fundamentals – my strategy is going to be to simply hold (and thereby avoid getting whipsawed) and wait for more data before making any critical decisions.
What’s yours?
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Nice ! UpVoted/Followed #SteemLove
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Thanks!
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Thanks for your analysis.
When asking random people in the streets if they know about bitcoin or other assets based on blockchain technology 9 out of 10 people are clueless. Since I do believe that in the years to come everybody will be using some form of cryptocurrency, the only way is up.
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Yes, the time to sell (long term) will be when those statistics are the opposite of what they are today, and, as you suggest, that's a long ways off!
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Nicely written. Simple and to the point. This shaking out effect is natural. We are in such a volatile scene and with all the upside we have seen since March this recent 'crisis' had to happen. Honestly better now than in a year when the tumble could spell doom. Let's spend some time correcting now so that when we go up, we can reach skies far higher than we expected before.
With that said this is level of speculation is why we should never invest more in it than we can lose. It really is way too wild wild West. And honestly I would prefer slower and steadier here. Easier for consolidation and less heart ache to the masses who invested during the crazy rise.
Regardless I do like to read something upbeat while we are taking nose dive at this moment, especially with ETH.
Thanks for the cautious optimism. :)
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Thanks for the upvote, the positive comments and for taking the time to share your ideas. We're getting some real bloodletting across the board right now that leaves us pretty much right where I was thinking we might end up. More than an optimist, I just prefer to make money, and that's usually done by buying when everyone's scared out of their wits and selling when everyone's talking about how rich they are. Of course, it also helps to have the bigger trend at your back, and I guess that's what makes me an optimist in this case. This is a major bull market we're witnessing, and sooner or later it's going higher, in spite of the volatility. At the moment this sell-off looks like a good buy that could well leave a lot of long tailed candlesticks on the charts. I suspect we'll know soon enough. ;-) Thanks again for dropping by.
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Wow what an awesome bonus chart here and yeah I was watching ETH specifically as it dived to about $250 today. Question of whether BTC will retest the lower $2000 and ETH lower $200s keep coming up from what I'm reading but I agree that this is just the beginning of a big bull run. The pattern of the reverse head and shoulders seemed to be a fakeout for now.
I'm basically ignoring June at this point as our one big correction month and repositioning funds for what I think will be a more successful rest of summer. Of course the biggest issues are with BTCs 2MB hard fork expected in November. I think that uncertainty plus when Segwit will be fully activated has a psychological impact on the space and might be adding some fundamental issues at the moment.
Keep it coming. :)
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We're already seeing another wave of selling and a retesting of last night's lows - Europe waking up. We're right at them as I write. Poloniex is a sea of red. The European cycle has been bullish as of late so it will be interesting to see what happens in the next couple of hours.
I think we're both on the same page as far as seasonality goes: seasonally things should be strong into the end of July, with perhaps some isolated weakness in August, and then strong again into the first half of autumn . . . which takes us into November and right up to that BTC hard fork you mention . . . very interesting the timing there . . .
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Absolutely on the same page there. I don't think there were any surprised that a deeper correction had to happen. I was waiting on it, especially for ETH. Nothing can grow 40x in such a short time frame without facing a massive fix to the price before going further up. I'm guessing we hit bottom with ETH today but never know if BTC decides to do another downward move it could bring ETH further down to test $200. Either way, upwards upwards.
And man, I don't want to even look at my holdings on Poloniex today haha.
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Good post, greetings
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Glad you liked it!
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