Ethereum Update 13aug18 How low can it go? Accumulation part1
Since the last swing high which ended on 06May18 Ethereum has declined an mind boggling 66%. This is a prime example of why playing reversals in bear markets is the very risky. Since the beginning of the bear market i have advocated risk management and capital preservation and to all those who took the advice it has payed hefty dividends. To be honest i am quite taken back by this movement and expected ETH to be around 250 when BTC hits 5k or so. However if you are into accumulating, this price point brings significant rewards if you can manage to hold out for profit and ignore the downswing. While bullishness is no where to be found i will lay the case for a high risk high reward long trade below. The key to performing this trade, is to wage such a small % of capital that the potential loss on this trade is a worthwhile tradeoff to be able to place a much larger position lower if this ETH falls even lower. When accumulating for the next bull run these are the kind of situations we should look for. A previous example is also linked below in my article "Ethereum under performance an opportunity for investors" where we made something like 50% before we took profits, We entered that trade without a stop loss and are doing the same here. Again the absolute maximum size of this position should be no more than 2.5% of your portfolio and even that is pushing it. The size of this entry should be about 1/4th of the size you want to dedicate to ETH in your portfolio for the next bullrun and if you are 100% in cash now. This is simply the first accumulation point with 3 more potentially to come.
Okay now to present the case for buying this coin.
As of this moment Ethereum is sitting on a very strong daily support at 280-285. Further down is weekly support at 250. ETH has retraced 100% of the late 2017 bullrun. We are literally back to my chart linked below "ETH A series of short term trades and whats next", which was right before the bullrun of late 2017 started. On top of that we have the momentum indicator Stoch RSI literally flat lined at 0(amazing). The daily RSI is oversold at 19, while the weekly is at 35(room to give). We are currently sitting at an 80% drop from the ATH in January. Literally nothing has changed fundamentally in ETH to warrant an 66% decline in 3 months, nor was the price justified in being valued at 1400. These are just the emotions of the underlying participants in the markets. The current mindset is panic and fear. For cool heads willing to accumulate at a low price this entry makes sense and is a risk worth taking. Again not a trade, it is accumulation
Okay now to present the case for buying this coin.
As of this moment Ethereum is sitting on a very strong daily support at 280-285. Further down is weekly support at 250. ETH has retraced 100% of the late 2017 bullrun. We are literally back to my chart linked below "ETH A series of short term trades and whats next", which was right before the bullrun of late 2017 started. On top of that we have the momentum indicator Stoch RSI literally flat lined at 0(amazing). The daily RSI is oversold at 19, while the weekly is at 35(room to give). We are currently sitting at an 80% drop from the ATH in January. Literally nothing has changed fundamentally in ETH to warrant an 66% decline in 3 months, nor was the price justified in being valued at 1400. These are just the emotions of the underlying participants in the markets. The current mindset is panic and fear. For cool heads willing to accumulate at a low price this entry makes sense and is a risk worth taking. Again not a trade, it is accumulation
about 7-8% up. If you want to set a SL in profit you can.