IN THIS ISSUE
- Ethereum bounces hard after $500 “flash correction”
- $BTC ranging continues
- “Dog Coins” hit the mainstage
Ethereum squeezed the leverage longs yesterday with a sharp $500+ pullback that amounted to a clean bullish throwback to just above $3,600. This dump sent ripples through the altcoin market as algos, and traders scrambled to reduce risk to the long side just in time to sell the dip.
It’s incredible to watch, time and time again, how humans react to price action in the market. BTFD is generally the best strategy to employ in a bull market. Most traders would say they understand this, but when the time comes, they often find themselves in a poorly positioned long and instead of racing to buy the dip, are left asking themselves if they should be selling to reduce “losing more”.
Not everyone, of course, I’m sure many traders took advantage of the brief fire sale and greedily scooped up the momentary dip which is what the price would suggest, having now recovered most of the drawdown from yesterday. But we all “felt it”. The lingering question that sits in the back of our minds. “Was that it? Did I miss the top? Is the party over?”. We’re humans after all, and the price chart is just human emotion painted in candles.
You could see the panic on the chart and social media and today we can see the FOMO as some race to re-enter their position at a small loss while scolding themselves for misplaying yet another juicy buying opportunity in a strong uptrend. If that’s you, don’t sweat it, it’s part of the learning process. Start a trade journal if you haven’t already. Journal your actions and feelings and throw some charts in it. Reflect on these journal entries over time and you’ll set yourself up for future growth and success.
Also bear in mind that ETH is parked in a short RLZ so if there is to be more downside, THIS is where I want to be hunting shorts, not at the throwback levels yesterday. But for what it’s worth, I don’t think we’ve seen the end of this bull cycle, despite what a leaderboard full of meme dog coins might say about this phase of the cycle.
$SHIB stole the $DOGE thunder this week, listing simultaneously on both Binance and FTX overnight. Some traders have already cashed in millions in profit, which will no doubt lead to a “dog coin” mania in the coming days and weeks. Looking at the DEXTools top 10 today, 7 of the slots are dog coins, but ETH fees will no doubt continue to cool the scene, for now, recently clocking in at over $200+ per trade on Uniswap.
Bitcoin continues to consolidate in the sideways range that formed at the beginning of March. Price continues to play off local fib levels cleanly, having just filled in the pump chaser zone on yesterday’s dip the bulls will make another attempt at the range highs here soon. Otherwise, we’re looking at a visit to range EQ, confluent with the local reload zone (RLZ), to fill in the gap on the VPVR.
Zooming out to the weekly you can see the 20-SMA continues to creep higher, now sitting around $49,219. If we break out of this prolonged consolidation, there is a cluster of price objectives hovering around $100,000 that should mark the next HTF consolidation area.
If we do break north following this range, expect the move to be very aggressive with little opportunity to buy HTF dips.
This 4hr Ethereum chart demonstrates the power of TA when it comes to finding good entries during a bull market. The green boxes mark support/resistance levels that, once broken, often get retested from above and make for excellent trade locations.
The tag yesterday was so fast, that anyone who didn’t have bids placed in the low $3,600’s was caught without an entry. The strong recovery speaks to the internal strength of this rally and suggests that it’s far from over.
The weekly price objectives, marked by the space between the local Chaos PRZ and Fib Extension give a large window for the next major area of interest between $4,800-$6,500.
If we get there, expect to see some profit-taking and perhaps finally, the big rotation into some other Uniswap/DeFi names that have been bleeding out vs. ETH over the last month+.
The ETH/BTC pair has been on absolute fire since breaking free from the “Livermore Cylinder” that we described on Delta-Fi earlier this year. The cat is out of the bag and there is no room here for dips apparently.
Price smashed through the .055 weekly resistance and looks primed to continue uninterrupted until the next major level up at .085. If Bitcoin holds on, that could take ETHUSD up into the price window mentioned above.
Bitcoin dominance tumbled sharply again last week, tagging the HTF .786 fib level, confluent with the June 2018 breakout level that market the acceleration of the altcoin bear market 3 years ago.
I’m still shocked to see how quickly dominance fell after breaking the October 2020 lows, and given how many major/mid-cap altcoins are still trading within their previous range, I can only assume we haven’t seen the low for BTC dominance in 2021 yet.
But when bounce? And for how long? That’s TBD, but I will tell you this…
If Bitcoin breaks out of this consolidation to the upside, I will be moving entirely out of altcoins and back to BTC, even if I miss the first impulse. It’s sure to be a violent surprise for altcoin traders even if just a 2-3 week counter-trend rally on dominance, and I want to position myself to buy the altcoin capitulation that would follow.
ALTCOIN & DEFI PERP
Depending on who you ask, you’ll hear different accounts of what’s been happening to altcoins lately. Many are still “waiting for altseason”, while others are clearing millions in meme dog shitcoin gains.
The fact is, the market has matured since 2017, and we may be looking at the new normal, where the behavior of altcoins varies greatly and it’s not simply going to be an “everything up” rally to help us cover up our weaknesses as traders.
Do you want your gains? You’re going to have to grind it out for ‘em. At least for now. Altcoin perp is still in price discovery, and I’m sure many of us wish we’d just longed the index instead of trying to pick winners in this everchanging, meme-filled, shitcoin wonderland/wasteland.
The DeFi perp continues to crawl up, lagging behind the rest for now, but still in price discovery. ETH fees have been crippling for the last few days which will no doubt continue to hamper the growth of DeFi names.
EIP-1559 and ETH2 upgrades can’t come soon enough! But they will. And when they do, I don’t want to be standing there scratching my head asking “How did I not see this coming?”. Patience.
The Total Altcoin Marketcap price discovery continues also, recently hitting a new ATH of $1,419,000,000. Looking at this chart entirely independently, I’d say we’re headed for an acceleration of trend here very soon. Q2 has been and continues to look like, it will be the most explosive quarter in crypto history!
I’ll continue to keep you updated on all the hottest opportunities I can find in the space, until next time, have a great week, and whatever you do, always play from a position of strength!
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The following commentary is provided for informational purposes only and may not represent the views of Hxro Games Ltd. or its affiliates, and should not be viewed as legal, tax, investment, financial or other advice. Digital asset transactions are inherently risky, and you are fully and solely responsible for evaluating your purchasing decisions at your own risk. Past performance is not indicative of future results.
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