ETH failed to hold its breakout of the 1700 level, it went to 1750 then sold off below 1700, the breakout horizontal line. This is a failed breakout. Yes, it climbed back and went to 1740 agin, but this is not what I’d consider a strong breakout — and it shouldn’t be — it’s up already 450 points with virtually no pull back. That may be ok, but from a 1500 psychological number the next big target is $1750, and it hit it and sold it. Then it failed 1700 support briefly, then made a lower high — it couldn’t get back to 1750.
ETH failed to break the 1750 number, that means it will be a sell target. Then I will place a stop above it at 1781. Enough distance that the break and run to 1775 will not stop me back in and perhaps the 1775 will hold. If not, I will be back in with a limited loss of 31 vs. a potential downside gain of 250 to 275.
On the flip side, there is a nice exchange rate on BTC from just about every asset under the sun right now and so that is actually what I want to trade into (ETH to BTC), but I want to time it with the USD fail of 1750.
Why BTC and not cash? Well I do want to get some cash too, but I think both ETH and BTC are still in an uptrend, so perhaps this is a good place to de-risk the DeFi boom.
BTC is forming a nice cup and handle here at 37800. The 37700 was also the dividing line for me when I was debating selling off back during the first collapse back in January. It’s time for BTC to punish all the alts. I’ve been worried about it for a long time, and it might not happen, but if it does, this seems to be when it will. We’ve seen it surge in just the last few days, and that was painful. It can do it again, and it will if it gains some steam when the alts calm down and with gas fees super high that is likely to be now if it is likely to be at all.
So back to ETH, my sell target was sold off early. I’ve noticed this, the 40s tend to be a good sell number because it is preemptive on the 50 line. Many times in the last wedge I was watching and looking for exits and each time the 40s came especially 44, that was about as high as you could get, and they only lasted a few seconds and then were gone, boom back down to 37.
As you can see, ETH traders like to use 25s as highs and lows and prices will rebound or inflect like a pinball off the 25s. Every 25 increment is a new battle. If its flowing from 00s to 25 it will probably get there, if it hits 25 and comes down to 19 it will probably go down to 00s. This can be useful in setting your buys and sells and also not worrying too much if prices go against you for just a few dollars, see how it behaves on the next 25 multiple.
See my middle pink line? It’s right on that 25. Even look to the left too, it sat around that 25, the hammer candle closed at 25, and two other support points to the very far left were on 25. Now, too above those you can see two resistance points on 50s then a temporary breakout above and then a push down and support held back at the 50s before that broke and we went straight to… yes a 25!
So now we have failed to bounce off 25, and are seeing if we want to go all the way back to $1700 for a 5th time. Let’s see what happens. I did sell a bit at 1733 and 1715 at 15:00 top of green candle as soon as I started noticing the failure at 1725.
I may lower my additional sells to 1744, because in the past I’ve learned it usually gives the advance several attempts and I did raise just a little cash here already.
Other things making me bearish:
3 of my contacts personally messaged me around 2pm Central (5pm Eastern) to see if they should sell ETH. That is coinciding with 5pm Friday close and a super high gas fee after a huge DeFi run up. The fact is was on their minds means I should believe it is on many traders minds.
Also my portfolio is at all time highs in BTC and USD, and that usually has been an indicator to sell and capture so of those currencies that I do not have. So in a way I’m diversifying by selling some ETH and buying some USD and BTC.
It was quick break down of the 1700 level so I grabbed some back as I think I’ll have a chance to sell it higher and give myself a bit of cushion.
ETH quickly descended and went through support at 1675 and all the way to 1650. I bought back at both levels and it is now climbing to 1688 presently. I still have about 1/5 of my cash, but realizing yes it seems what caused this decisive slide was the ETH to BTC conversion rate.
It looks like I’ll be converting some of my ETH to BTC here and perhaps do a 50/50 split. It’s still high and so is ETH/USD, and well BTC is just about to break out, so that should bring in the USD demand there.
