Are we going to see Ethereum below $100 again?
Why be bullish, when there are no breakouts of downtrends at this point?
Personally I’m serious confused by the bullishness of the market lately, while we didn’t break any major downtrend on either Ethereum or Bitcoin and we had a major selloff three weeks ago.
Also, I’m enjoying the typing on TradingView, so I’m going to do that more often in the future, as Twitter doesn’t have that much space to describe why I’m thinking what I’m thinking.
First of all, I’m short term bearish on Ethereum and crypto. After that we’re probably bottoming in April/May and done. The fun starts then, as we’re going sideways to accumulate. I’ve often tweeted that 2019 is the best year to accumulate and I’m quite sure you won’t regret it when you do it, despite everybody whose going to tell you that crypto is dead.
Let’s face what we see on Ethereum here and why I’m still bearish.
- The fear & greed index is back at very high levels. Last time we've had that level was 14 November (and on every other peak of the price in the past year).
- We have seen a major selloff 3 weeks ago, which caused a drop from $167 to $132 within a few hours. Many people stated that this is profit taking, but I doubt that. Profit taking would be an healthy move with normal retracement, not a total panic dropdown of a few hours where everybody is panic selling. Also, that weekly closed as a gravestone doji, which in general doesn’t make me bullish on the market at all. Therefore, every upwards movement feels like an opportunity to short.
- Since the major selloff we’ve made a rising wedge upwards with 0 volume. The volume vanished away. In upwards markets it’s normal to have a downwards correction before continuation upwards, so in downwards markets it’s also normal to have an upwards correction, which I’m generally calling the movements of the past few weeks.
If we get back to the major sell-off we can see some important things on that one there too.
- We’ve made a SFP there, as we denied a breakout upwards and barely made a newer high resulting in the rising wedge. Typically not calling the pattern an ascending triangle.
- We’ve rejected the downtrend redline there, created since September and at this moment the first one to break down, before we’re getting towards the main downtrend line (black one). That rejection is a bad sign.
- We’ve also rejected the horizontal resistance around $167 as we couldn’t break upwards.
Concluding, that dropdown is a bearish sign and given that we didn’t break a downtrend, we’re not out of the woods yet (personal opinion).
If we combine that with the latest movements on the longs and shorts, we see something interesting too.
The longs on Ethereum on Bitfinex are at an all time high, while the shorts are swimming around the all time lows.
History: Beginning of December we had an all time high on shorts on Ethereum resulting in a big breakout upwards and almost a flip within 2 weeks to squeeze all the shorts.
History part 2: Beginning of April 2018 we had a short squeeze in BTC, while the shorts were at an all time high there too. This caused a rally of $2000 in a matter of days.
If we combine this all, then I’m not bullish at all on Ethereum and I’m short on this one. If we clearly break the $167 level and find support there, I’m getting bullish, but there’s no point at this point.
Also, if we break this rising wedge downwards (and then Bitcoin is dropping down too), we most likely lose the trendline we’ve created since the ‘bottom’. If we lose that line, we’re definitely in a downwards move and could possibly hit $40-50 (as that’s a big block too).
Will update this one.
Personally I’m serious confused by the bullishness of the market lately, while we didn’t break any major downtrend on either Ethereum or Bitcoin and we had a major selloff three weeks ago.
Also, I’m enjoying the typing on TradingView, so I’m going to do that more often in the future, as Twitter doesn’t have that much space to describe why I’m thinking what I’m thinking.
First of all, I’m short term bearish on Ethereum and crypto. After that we’re probably bottoming in April/May and done. The fun starts then, as we’re going sideways to accumulate. I’ve often tweeted that 2019 is the best year to accumulate and I’m quite sure you won’t regret it when you do it, despite everybody whose going to tell you that crypto is dead.
Let’s face what we see on Ethereum here and why I’m still bearish.
- The fear & greed index is back at very high levels. Last time we've had that level was 14 November (and on every other peak of the price in the past year).
- We have seen a major selloff 3 weeks ago, which caused a drop from $167 to $132 within a few hours. Many people stated that this is profit taking, but I doubt that. Profit taking would be an healthy move with normal retracement, not a total panic dropdown of a few hours where everybody is panic selling. Also, that weekly closed as a gravestone doji, which in general doesn’t make me bullish on the market at all. Therefore, every upwards movement feels like an opportunity to short.
- Since the major selloff we’ve made a rising wedge upwards with 0 volume. The volume vanished away. In upwards markets it’s normal to have a downwards correction before continuation upwards, so in downwards markets it’s also normal to have an upwards correction, which I’m generally calling the movements of the past few weeks.
If we get back to the major sell-off we can see some important things on that one there too.
- We’ve made a SFP there, as we denied a breakout upwards and barely made a newer high resulting in the rising wedge. Typically not calling the pattern an ascending triangle.
- We’ve rejected the downtrend redline there, created since September and at this moment the first one to break down, before we’re getting towards the main downtrend line (black one). That rejection is a bad sign.
- We’ve also rejected the horizontal resistance around $167 as we couldn’t break upwards.
Concluding, that dropdown is a bearish sign and given that we didn’t break a downtrend, we’re not out of the woods yet (personal opinion).
If we combine that with the latest movements on the longs and shorts, we see something interesting too.
The longs on Ethereum on Bitfinex are at an all time high, while the shorts are swimming around the all time lows.
History: Beginning of December we had an all time high on shorts on Ethereum resulting in a big breakout upwards and almost a flip within 2 weeks to squeeze all the shorts.
History part 2: Beginning of April 2018 we had a short squeeze in BTC, while the shorts were at an all time high there too. This caused a rally of $2000 in a matter of days.
If we combine this all, then I’m not bullish at all on Ethereum and I’m short on this one. If we clearly break the $167 level and find support there, I’m getting bullish, but there’s no point at this point.
Also, if we break this rising wedge downwards (and then Bitcoin is dropping down too), we most likely lose the trendline we’ve created since the ‘bottom’. If we lose that line, we’re definitely in a downwards move and could possibly hit $40-50 (as that’s a big block too).
Will update this one.