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BTCUSD Perspective And Levels: Is This A Good Time To Buy?BTCUSD Update: Price continues lower as it nears the 6040 support. What makes this area especially notable is that fact that it is the previous range resistance from October (5960 to 6150 highs). This is a likely area for price to retrace into a Wave B counter correction. Price appears to be falling like a rock and scaring out the weak hands. Now the 7500 price action doesn't look so appealing any more. My guess is that most people who bought into the 7ks not wanting to miss the train, are now jumping off the train. At the moment, 6841 is the .382 resistance of the recent bearish swing. This level will keep adjusting lower until price stops making new lows. As long as price stays below this level, it is likely to trend lower, even after a minor bullish retrace to test this level. The bullish retrace I am describing would be the Wave B leg of the correction which is counter to bearish momentum at the moment. Wave B is what sucks in many early longs and then fails to make a new high. This Wave is tricky because it is actually possible for it to retest the previous high or go slightly higher before the C Wave asserts itself. The 6040 area and price range just below 6k (high 5900s) is the old resistance of the October consolidation. This is a high probability area for a price bounce and convenient starting point for Wave B. Is this a place for swing trade longs? No, but day trade sure. Again you must be agile and take profits when you can because a bounce to the high 6900s is not unreasonable over a day or two. Why not a swing trade long? There is no justification of stability on this time frame. When markets are this dramatic, swing trades carry a lot more risk because the more time you are in the trade, the more of a chance things can change and go against you. I would rather initiate a long once I see solid signs of reversal on this time frame, like a double bottom. If day trading though, the chances of a reversal pattern appearing just above the 6040 area but on a smaller time frame are much greater. All you need is a small bounce of 100 points, and have a nice trade on your hands. That is where the opportunity is in this market, again if you have the time, experience and agility. If you think you are going to hold it to 7900 from here, that is where the problems arise. I am interested in a long, but not at these levels unless I see a range, or a large time frame reversal. Also keep mind the money that is migrating out of this market is not exactly going into all the alts. It appears BCH is where the order flow spot light is at the moment. That would be a better market to look for longs in upon a retrace. The question is, when this market bounces, will BCH pull back simultaneously? That would offer a swing trade opportunity long since that market has a ton of potential both near term and long term. In summary, unless you are day trading, this market is not in a position that offers attractive reward/risk for swing trade longs. It is too early to begin buying for a multiday or mulitweek hold in my opinion. For the traders who had the courage and conviction to short and stay short, this is a good area to lock in some profit as well (never hurts to reduce risk). The next resistance is the 6840 area and will likely be an attractive level to short again (to be clear, I do not short these markets). If the next bullish retrace is shallow (stays below 6840) and turns lower, the next leg can take this market into the 5ks. I report what I see and propose scenarios based on the price structure that is present at the moment. Things change extremely fast in these markets, and not getting stuck with an opinion and being flexible to whatever the market throws at you is more valuable than trying to figure out "why" everything is the way it is. It just is. Accept it, trade it or not, adjust and move on. That is the active trading mentality. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
21
BTCUSD Perspective And Levels: Is 6K Retest Possible?BTCUSD update: Price declines significantly breaking below the 6900 support and triggering the water fall of sell orders which is perfectly normal. While the double top is confirmed and the bearish momentum in play, this is NOT the time to be buying supports unless you are day trading. In terms of wave count, this is the A Wave which is the first leg of a corrective formation. Often the B Wave is the bullish retrace that establishes a lower high, which is then followed by the C wave which is the deeper and emotional wave the completes the correction. At the moment, the .382 resistance measured from the 7900 high is at the 7000 level. This means as long as price stays below this resistance, this market is likely to continue lower. Keep in mind B Waves often go to the .618 resistance before the C Wave begin. In recent months, these corrections have been tricky. They have been brief, and the bullish trend has continued without much interruption. That can happen here also, but I have no intention of buying into this retrace to find out. At this point, momentum is bearish and I expect supports to break, until one of two things occur: price retests a MAJOR support area and finds enough stability to present a reversal pattern on a larger time frame, or price spends enough time in a consolidation to qualify for stability and potential continuation of the larger bullish trend. (Like the formation that occurred on early October). The projected support that I am looking for to eventually be retested is the 6048 area which is now the .382 of the bullish structure measured from the 3005 low. It also happens to be in line with the old resistance that was part of the previous consolidation earlier in October. That is a reasonable completion point which I do not think will be retested in one single leg. It would be a convenient level for a Wave C to complete and I will be watching for that type of price action. A decisive break below this support, and price may be working its way toward the 4950 area which is now the .382 of the entire bullish structure measured from the sub 100 lows. This level is not that unreasonable in terms of the bigger picture. These are the levels that are within reason BASED on market structure. I know the limits of TA and do not pretend that it provides an absolute forecast of what will happen in the near future, I am flexible and adjust with the market. In my previous report I wrote about looking for opportunities in the alts, but the main ones, ETH and LTC got hammered in this sell off as well which once again demonstrates the inconsistency of the BTC/alt relationship. BTC goes higher, the alts sell, BTC gets hammered, the alts sell too. So instead of playing victim to it, I just look at each market individually and wait for opportunities to appear while putting much less weight on the BTC relationship. And on that note, the big winner is BCH which is now pushing 1k (very nice call by @goldbug1 on that one). Another great market if you are agile, the funny thing is this one was selling off along with this market until today (I'm sure it's news related). In summary, my plan has not changed: Avoid this market, look for opportunities in the alts if the levels and formations make sense in terms of risk on their respective charts. If you have the skill and experience to day trade, there is plenty of opportunities to buy and sell these large intraday moves (600+ points in a day is a lot to work with). This sell off was coming, like I wrote previously, the structure was in place. Anything could have sparked the avalanche of sell orders. Being long term bullish on these markets, I am all for buying pullbacks, but the key is not to buy too early. Right now is too early for a larger time frame type of strategy like swing trading in my opinion. Don't be shaken by the drama pouring out of the media outlets. Stay calm, be flexible and most importantly have some kind of plan. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
36
BTCUSD Perspective And Levels: Just Needs A Push.BTCUSD Update: Interesting turn of events now that Segwit2X was conveniently cancelled. With no incentive for free money, why isn't this market falling apart? It just needs a push. I will explain. I was not aware of the news when I published yesterdays report, but I was aware of the price action. After I found out, I looked up some articles and you really need to consider the sources. There are all kinds of random, uneducated nonsense articles out there that are being published to generate page views to justify higher ad revenue. Knowing that Segwit2X has been cancelled is useful, but everything else? Clearly these are not market technicians writing these articles. Also someone pointed out that interest in this market is at all time highs. The institutions want in, the CME is introducing a futures contract, and it is just a matter of time before the SEC approves an ETF for the mainstream to invest in. In the long run, these are bullish fundamentals for sure, but for the short term? This is a sign of a top. New traders and investors do not understand the contrarian point of view, but it basically says, "The crowd is always wrong at major turning points." All markets work this way, it is a pattern of the herd mentality. We are programmed to think in terms of logic, but markets do not work in obvious and logical ways, they are irrational which is why we must always be open for anything. It is also worth mentioning that when the futures and/or ETFs start trading, it is going to constrain the short term opportunities in this market because futures and securities are regulated. I don't know how the developer community is going to propose and cancel forks in a regulated environment. Here are the facts right now: A double top is present on the larger time frames which is a bearish sign. 5 of 5 Waves are likely complete, another bearish sign. The 7900 level was a price extension coming from a major low, often these levels serve as completion points (wrote about this in my previous reports). If the market is going to retrace to a much deeper level, it is now in position to begin that decline. What is missing is the catalyst. All this market needs is a push which can be some kind of news of government action, etc. I am not one to paint rocks (in contrast to rockets), but retesting the 5700 area is not that unreasonable. A break below that and the 5k level is also very possible. These levels would actually be a normal and healthy retrace if you observe them on the weekly chart. The first thing that needs to happen is the break of 6900 swing low. If that level holds, or does a false break (a fake out) near that area, this market may just be consolidating instead of selling off sharply. Also the alts got a boost on this news. ETH, and a bunch of the cheap ones are all up nicely which shows that the current state of the BTC/alt relationship is inverse. IF this stays intact (it has changed a number of times) then it is reasonable to expect the alts to perform as money migrates out of BTC. At the moment I am looking at the alts like LTC, ETH for possibilities if BTC declines (IN THE SHORT TERM). In summary, you must be open to anything. So many less experienced traders/investors expect TA methods and indicators to offer precision. This is not a lesson in engineering. There is no precision. The goal of analysis is to discover clues and weigh probabilities to see if potential outcomes make sense in terms of risk that we are willing to take. If the market presents an unanticipated scenario, we simply adjust. That's short term speculation. At the moment my plan is to completely avoid this market for any swing trade longs, and look to the alts for opportunities. The way I am interpreting this situation in light of the Segwit2X cancellation is this market is vulnerable to any bearish catalyst of a larger magnitude, like a Chinese government action or something along those lines. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
57
BTCUSD Perspecitve And Levels: The Outside Bar Bearish Reversal.BTCUSD Update: Higher low established at the 6900 area followed by a new upswing that has just spiked to 7900 and formed an outside bar. This is the Wave 5 of 5 that I have been writing about that may have exhausted its potential going into the fork over the next 8 days. Once the incentive is over, the environment will be setup for the beginning of a much larger correction. Especially now that an outside bar is present. I like to describe Elliott Wave as a "road map" that gives us an idea of where we are within a trend. This information helps us to form realistic expectations about what is possible in the near future. (This is why I never paint rockets). Once I can confirm a count of 5 waves within Wave 5, I know that the next wave is most likely going to be a more serious correction because often the market goes into Wave A (the first leg of a corrective series). That is the more straight forward part of using Elliott Wave, but it becomes more challenging when you are trying to figure out how deep the correction can go. That is called the magnitude of the wave. The reason why I am saying that once this 5 of 5 completes, this market is in position for a deep correction is because if you look at this market on a weekly chart, you will see that this entire rally coming from 150 per coin, will be completing 5 large degree waves. The chances of a large magnitude Wave A (aka deep correction) are very likely in this section of the "road map". You can think of this entire structure as a giant Wave 1, and we are about to go into a giant Wave 2 which THEORETICALLY can retest levels below 1k (this can take weeks or months). Now that 7900 has been touched and the market immediately sold back to 6977 within hours is a very bearish sign. Outside bars are considered reversal patterns and for this one to appear at these levels within a Wave 5 of 5 adds to the argument significantly and can begin selling off even before the actual Segwit2X (Buy rumor, sell news). Not only is this price action showing an outside bar, but on larger time frames it appears as a pin bar. A break below today's low and we are in for selling of a larger magnitude. Isn't 7900 is a new high? It is only 300 points higher than the previous high of 7600 which relative to this market is not that much higher. This can be interpreted as a failed high or double top variation and again another reason not only to avoid longs on the swing trade time frame, but also to expect a deeper correction soon. If price breaks below the outside bar, I will NOT be looking for any buying opportunities at the upcoming supports because I expect them to break. A decline to 6750 area will further confirm the initial leg of an A Wave which can be followed be a B Wave (bullish swing, lower high) going into the fork. After that, if this market has not broken higher (beyond 8k), and these current highs are still intact,it will be reasonable to expect a retest of the 6k level or lower in the following weeks. In summary this market is now in position to sell off on a much larger degree. Being in a Wave 5 of 5 along with a blow off top (outside bar) and volume spike, (40k coins vs 10k average) in 4 hours are all bearish reversal signs. There will be plenty of smaller time frame retraces worth 100+ points which again is a day traders market. As far as swing trades go, I am now avoiding all together. Along with this bearish spike, the alts got a bullish spike which may also translate into a bullish reversal that may continue as BTC money stampedes for the exits. If YOU short these markets, now is the time to look for opportunities since structure is now in place. I will not be too surprised if the market begins to sell sooner than the fork, with a lower high forming into the fork day and then failing. Remember I am just estimating based on price structure, as long as price keeps generating bearish signals, I will be staying away from this market. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
58
BTCUSD Perspective And Levels: How Low Can It Go?BTCUSD update: 7030 is touched as price attempts to retrace after the relentless rally. The big question: Is this the beginning of the big correction that everyone has been waiting for? Or just another shallow retrace? I will refer to Elliott Wave in order to get an idea of what is reasonable to expect. After the consolidation breakout which eventually got labeled as a Wave 4, the count for the 5th wave is pretty clear. The current retrace puts us in 4 of 5 which implies there is a chance that we get one more attempt at new highs before the BIG correction. We are now 10 days away from the fork, which makes for plenty of time for a retrace, a reversal and one more push toward 8k. As I wrote about in my previous report, there are extension overlaps in the 7900 to 8k area which makes it a convenient potential peak. So if I were shorting (to be clear I am not), I would not be too aggressive with target expectations on this leg. 6840 is the nearest support which happens to be the .382 of the recent bullish swing measured from the 5632 low. That level may offer a swing trade opportunity long if a smaller time frame reversal pattern can appear there. If that initial support breaks, the next support is the 6640 level, which is the .382 area of the bullish structure measured from the 5114 low ( previous Wave 4 low). IF price actually retests any one of these supports, and a bullish reversal formation shows up on a smaller time frame like the 1 hour, these would present attractive reward/risk opportunities. The key to this is the bullish reversal formation (like a double bottom) which provides a reference point to measure risk from. Without that, we are just bottom fishing. The mistake you want to avoid is jumping in too early. This is an easy mistake to make without any point of reference or too much focus on smaller time frames while attempting to swing trade. For me, the entry process begins with the level, and if price is not at a level that I have defined previously, then I have no reason to do anything else. Once it reaches a level then I move on to the next step which is to evaluate the chart patterns. What if price never makes it to a level and reverses sooner? That can happen, and that is not a trade that I will participate in. I am looking for opportunities that fit within my criteria for my swing trading plan. This keeps my decision making simple and helps to minimize any emotional tendencies like forcing trades because I am afraid to miss the next move up. How do we know this is not the big correction? I am anticipating that it is not because of the fork in 10 days. I believe many of the investors who missed out will see this as an opportunity to get on board the money train before it goes to 10k (which is what all the hype is telling them). That may be enough to get this market to retest the high which will complete Wave 5 of 5. After that, any correction like this and I will be expecting much lower levels. Anything can happen and I could be wrong, but that is what I am going by until the market proves otherwise, In summary, the current retrace is perfectly normal and still very shallow at the moment (relative to this market). This exact price action is why I do not buy at 7500 even though this market still has a chance to run to 8k. I am willing to take a long swing trade at the 6840 level or 6640 level if price action cooperates (and risk can be clearly defined) and hold it only for an attempt of retesting the high. Wave 4's are typically the easiest wave to forecast because 3 waves have to be in place which is the scenario at the moment. Since swing trading means a trade can go on for days, it is a tougher strategy to employ in this market because of how quickly things change. So for now I will wait to see if the market can reach my predefined levels and then evaluate the chart patterns from there. Be patient and be flexible. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
BTCUSD Perspective And Levels: Failed High Or Minor Retrace?BTCUSD Update: A push to a new high, but could not sustain the break out. This failed break is a bearish sign which still maintains the possibility of the C Wave to unfold which can take prices to the 5500 area or even the 5360s. Aren't new highs usually a bullish sign? They are, but in this case, not only is price structure presenting a possible double top, but can also be showing the B Wave that I wrote about in my previous BTC report. B Wave corrections are 3 leg waves that can actually take the market to a slightly new high, just like what has happened in this market, and then fall apart which is the C wave. Now keep in mind, I am estimating the near term direction based on the price structure that is in place at the MOMENT. Things change very fast in this market, and the ability to adapt quickly is what makes a good trader good, not getting stuck on an opinion and then complaining that my analysis didn't play out. For the less experienced, TA is not a weather report. This is why I always recommend learning how to make your own decisions, so that when the market changes, you can change with it, instead of fight it. The other factor that is prompting me to expect weakness from this point rather than strength is the area of price failure. The 6200 to 6400 zone is actually an extension based on the recent swing from 6206 to 5362. This zone is where false breakouts are more likely to occur, so if the market is going to break out, it needs to clear this zone, not run up into it, and then sag like it is now. I do not short these markets which I have explained previously, so the best I can do it use these signals as a reason to stay flat. A confirmation that more selling is likely would be a break of the 6k level which is not only psychological, but it is now the .382 of the recent bullish swing. Shorting this market can be rewarding, BUT as I keep writing, you must be on top of it, and you must have a solid plan so that you can recognize when the market is turning back up and get out quickly (definitely not a good idea for less experienced traders). If you are trading without a set of criteria to guide your decisions, then you should not be trading at all in my opinion. What about the higher low at 5632? I wrote about this scenario in my previous BTC report as well. This structure cannot be ignored and certainly challenges the short argument. It is possible that this level is a Wave 2 bottom which makes the current leg a possible Wave 3 of 5. This is where the market must choose. If price manages to stay above the 5960 area, and starts pushing highs, then that would be a confirmation which can take prices into the 6500 area. I don't know if this will happen, but any sharp rally from the current level will confirm this scenario. In summary, for those who are less experienced with TA, it is far from an exact science, and you must not expect a forecast to play out exactly. TA offers tools and methods to isolate potential scenarios from countless possibilities. From that point, we can then evaluate risk and reward and decide if the trade is worth taking in accordance with our plan and risk tolerance. In the case of this market, the risk is still too high to buy for ME and since I do not short, then all I can do is watch. I am interested in buying AFTER price has retested a support zone like the 5500 or 5350 areas (that is IF the market offers that opportunity). If price can reach the lower 5k supports, that would be a convenient area to complete this possible Wave 4, and that is where the lowest risk opportunity is to participate for a Wave 5 back up into the 6500s. Either way, this market will eventually line up with my criteria, and when it does, I will be prepared to act. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
42
BTCUSD Perspective And Levels: The 5330 Target?BTCUSD Update: Price retraced off the 6020 high establishing the lower high formation which is a sign of weakness especially since the .618 resistance area held. Now that the 5690 minor support is taken out, this market is most likely in the C Wave of 4 which can take price to the 5323 level. Like I wrote about in my previous BTC report, lower highs often lead to lower lows. In terms of simple resistance levels, 6020 followed by 5870 are lower highs.The consolidation between 5690 and the 5870 level (which happens to be the lower boundary of the .618 resistance zone of the initial bearish structure) was the confirmation point for continued bearish momentum. A break below this zone further confirms the C Wave of 4 is in play. In terms of Elliott Wave, I wrote about how the market needs to choose between the two scenarios. The first is the bearish C Wave, and the second is the bullish higher low between 5600 and 5500 which would then be a Wave 2 low. At the moment I am leaning more on the bearish C Wave because of the lower highs that are in place. Until bullish price action returns and proves itself (as in forming a higher low in the 5500 area), I will just listen to what the market is saying now. If this is truly the C Wave, then within the wave, the break of the 5690 support is be the beginning of Wave 3 which can complete around the 5530 area (1.0 extension of initial wave) before there is a bounce attempt. After a minor retrace, the Wave 5 of this formation can take prices as low as the 5330 area (1.618 extension of initial wave). For people who wonder why I do not short even though I am writing about bearish scenarios. The answer is I only play one side of these markets and do not use margin. Shorting these coins, especially this one, requires a ton of attention, because things change so fast. If I want to get involved in swing trade shorts, I would rather do it in the forex markets. In summary, this market appears to be following the path of the C Wave of 4 that I wrote about previously. If it continues without any curve ball surprises, then the 5330 level is a likely target. There is plenty of opportunity to short this market on the smaller time frames if that is within your trading plan. My plan is to wait for this Wave 4 correction to complete and get long in anticipation of Wave 5. Either way, as you know, anything can happen in this market and being flexible will serve you well. Price action often signals changes before anything else. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
13
ETHUSD Perspective And Levels: Lower High Or Higher Low?ETHUSD Update: I am still long from 298.84 while watching this market unfold in a tight range. I have placed an order to sell half of my position at 289.50 which will leave me with 15% of my normal position size with a stop at 279. When a trade is not behaving the way it should, then it is time to reduce risk. So here is my plan: If 290 breaks, then I want to see how price behaves in the mid 280s which is the .618 of the recent bullish swing. If price falls below that, then 270 is the next support which held previously (I wrote about the importance of this level in my previous report). If the 280s hold, I will look to add back to my small position, if 279 is taken out, then I will be fully stopped out. IF price breaks below 270, that will open the door for a retest of the 250 level which is also a key support for a number of reasons. It is a 1.0 extension measured from the highs, and it is also within the .618 support zone of the entire bullish structure that led to the 355 swing high. If I get fully stopped out at 279, I will not reenter until I see bigger picture momentum showing clear bullish signs. At the rate this market is moving, that may take a couple of weeks. Keep in mind, the type of trade I am focusing on is a swing trade. There are more frequent opportunities both long and short on the smaller time frames if you are looking for more action, but you must be quick on the trigger and be extremely flexible with your decision making. Being caught with an opinion on the wrong side can be expensive. Right now, I am leaning more on the bearish side because a strong market spends more time messing with highs, rather than lows. A break below 290 will establish a lower high formation and that often leads to further weakness which means the oncoming supports are more likely to break. Not exactly a good environment for longs. In summary, I am more interested in reducing risk at the moment. If price retests the 280s or low 270s and shows significant support and reverses, I can always get back in after some confirmation. Strong markets push resistances, not keep testing supports. I am still holding a small portion long with a stop for half at 289.50 and the other half at 279 to give this market a chance to prove it has strength in the 280s and negate the current bearish environment. Let's see what happens. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
23
ETHUSD Perspective And Levels: 250 Support Zone.ETHUSD Update: The 286 support has been compromised along with a lower low. If this bearish momentum continues, the 258 to 232 support zone is where I am watching for price to retest next. In my previous report, I updated that I exited half of my position in the 290 area for a loss and mentioned that I will hold the other half with the 283 stop which obviously stopped out. Losses are part of the game, and occasionally a string of losses can happen. So I am now flat, and intend to stay that way until this market provides clearer signs of stability and a possible reversal. The best lessons you can learn are from your losses. And in my case, I was being too aggressive by not waiting for confirmation on the larger time frames. Also remember, my position was a fraction of my normal size, even when I bought into the second portion, it totaled on 60% of my usual size. Not only that but I reduced my risk even further with my early exit as well. The 258 to 232 level is the .618 of the recent bullish structure and I have been writing about it for some time. It is a wide zone, just like the wide resistance that this market is selling off from, which means it can consolidate within the boundaries of the zone before showing any significant signs of change. An interesting level to note within the zone is the 249 area. The reason is it is a 1.0 extension measured from the high of this bearish swing. Often these extensions offer good points of reference for momentum to become exhausted and price to reverse. (See BTC chart, 6220 was a similar bullish extension and we see where price is now). So I will be watching the lower 250s closely to see if price can build any meaningful structures that imply strength coming back into this market. Another level to watch for is the 304 resistance which is now the .382 of the current bearish swing. As long as price stays below this, this market is more likely to see lower prices or stay in a range. Keep in mind, this level will keep adjusting lower as price makes lower lows. Eventually this trend resistance will be taken out which will offer a form of longer term confirmation that the momentum has changed back to bullish (that would also be a good time to stop shorting for those who are short). Also the relationship with BTC seems to be this: BTC goes up big, this market sells, BTC sells off, this market sells off harder. Like I wrote about before, the relationship is changing rapidly because there are so many variables affecting the order flow of these markets. For that reason, I try to focus more on the information that the chart provides, especially for short term price action. In summary, now that the 286 support is clearly taken out, I will stay flat until this market can stabilize and offer new swing trade long opportunities. There may be some more fake outs along the way, but I am not going to take any price spikes seriously until they can evolve into bullish structures on the time frames larger than this one as well. And that will certainly take some time. If the market can work its way into the 250s, I would be most interested to see what happens in that area. I have been in markets long enough to know that opportunities are just a matter of waiting for the criteria that matches your plan. So it's back to waiting for me. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
31
BTCUSD Perspective And Levels: Larger Correction Likely.BTCUSD update: Zooming out and looking at the bigger picture always provides important clues as to what price is more likely to do in the near future. In this analysis I am reevaluating the Elliott Wave count in light of the most recent support and resistance levels. The next wave that is most likely to unfold is a bearish one and can take this market back into the mid 4000s before reaching for new highs. As I have written about before, I always perform Elliott Wave analysis but I do not always write about it. The reason is simple: I do not want to confuse my readers, so when information is clear and makes the most sense, that is what I write about. Whether that is talking about Fibonacci levels, wave counts or other relevant levels chosen by the market. Right now in this market, the wave count is worth highlighting. The reason is this: the market just wowed the world with a breakout above 6k. It went slightly higher and then pulled back to a minor support. Enthusiastic buyers who want in will see this as an opportunity not to miss the BTC train to 7k or whatever new number the hypsters are hyping about and it is a trap. I will refer to Elliott Wave to further explain. Going back to earlier this year and recounting the waves puts the current rise into much better perspective. And as you can see on the chart, the sell off that occurred in the previous month was the Wave 4 that I was expecting to unfold further at the time. The market proved me wrong and with the new upleg in place, there is a clear count with a recent high completing 5 subwaves of Wave 3 of a larger 5. When 5 waves complete, often a correction follows, and the coming correction in my opinion is a Wave 4 retrace that can take price back to significantly lower levels. The first support is the .382 of the recent bullish structure which is the 5159 area. A break below that, and price can possibly retest the 4526 to 4073 support zone which is the .618 of the recent bullish structure. Corrections typically unfold in 3 waves, A is the first retrace, B which can actually take this market to a slightly new high, and then the infamous C Wave which is often the emotional sell off that scares everyone out of the market. The good news is after this Wave 4 completes. then there is the expectation of Wave 5 of 5 which can possibly take this market into the 6500 area (which happens to be the 2.618 extension measured from the low of this wave). Also Wave 4's are often the most predictable wave because 3 waves need to be in place first (which they are). The upcoming forks may serve as an appropriate catalyst to help Wave 4 unfold, also remember a bearish surprise can come out of no where and trigger the persistent selling as well. In summary, this wave count offers a possible road map as to how price is more likely to unfold in the coming week(s). How is this helpful? Well it tells me not to take any longer term positions at these levels for one, and to keep my profit expectations low if any long setups do occur on smaller time frames. Remember this is just an idea based on the structure that the market is presenting at the moment. I will be using this as a reference to be prepared for the Wave 4 low and reversal. I will also be watching for bearish confirmations along the way and if they don't occur, then I know this wave count carries less weight. And just to be clear, I am not shorting this market, just waiting for the next buying opportunity. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
30
ETHUSD Perspective And Levels: Watching For Higher Low 290s.ETHUSD Update: Price reaches the 286 support area and rejects it with an initial push back to 310. This may be the beginning of a bullish reversal formation on the larger time frame and I am WATCHING carefully for a new swing trade long. BTC and the rest of the markets broke supports and pushed lows, which is interesting because when BTC pushes highs, these markets are not so quick to follow, but when it is pushing lows, the follow the leader behavior shows up again. With that being said, this market has reached even more attractive support areas for a swing trade long. The 295 support is the .382 of the entire bullish swing which broke but the 286 level which is an area of repetitive buying not only held, but got a rush of bullish price action taking this market back up to 310. Often sharp bounces like these are the beginning of a momentum change, in this case back to bullish. The other great thing about this situation is risk can be clearly defined by the 286 level. So my plan is to wait for a retrace possibly back to 300 or slightly below and look for a swing trade long entry. If a price area between 300 and 295 can show a bullish candle, I will look to go long in that area with a STOP AT 284. Once again to control risk, I will start with a smaller position of 25% of my usual position size. My target area is in the high 330s. Reward/risk is about 2.5/1. Also if I manage to get long and price is behaving the way it should, I will look to buy the other 75% of the position upon an upside break of 310 (AFTER I am in my initial position, otherwise I stay FLAT). Buying into bearish momentum is a process that requires strict attention to risk. It is possible for this market to keep selling if the 286 level is taken out again. The next support is in the 258 to 232 zone which is the .618 of the entire bullish swing. If price retests the lower support zone, that would signal to me that a consolidating market is more likely to follow rather than a retest of the highs. Either way, that area can offer swing trade opportunities as well (adjusted with more conservative targets). In summary, sell offs such as these are where the lower risk buying opportunities often reveal themselves, not at the highs especially when everyone is "painting rockets" as one trader once so eloquently described. It isn't easy though because the randomness of the market is always throwing curve balls, that is why keeping risk minimized is so important during a time like this. Absorbing small losses while seeking to buy into a supportive area is not that uncommon, especially with the amount of emotion that leads to large price spikes. I will be watching the low 300s to 295 area for reversal signs and look to reenter long there if my criteria is met. Let's see what happens. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
43
ETHUSD Perspective And Levels: Double Top In Resistance Zone.ETHUSD Update: Double top has now appeared within the 320 to 352 resistance zone, just under the 357 extension. This is a bearish sign and can lead to a retest of the low 300s which is the area I am looking for a possible swing trade long. Now keep in mind, this double top does not mean the strength of this market is over, but it is a formation that signals weakness at the moment. A retrace to 315 can present a double bottom and possible swing trade long opportunity as well, it all depends on the price action IF the market can retest that level. The other factor is BTC because if bearish momentum takes it to much lower prices, this market may get affected as well. If that is happening during a retest of the low 300s, I will most likely avoid until BTC is reversing also. The relationship between these two coins is far from predictable, but I would rather observe it while flat, than stuck in a position that has more factors against me. The current levels still offer a chance to lock in some profit for those who got in a much lower prices, BUT if you intend to hold some as an investment, this does not mean sell it all and try to get back in. Holding a core position means you allocate a small percentage of your capital to holding some no matter what, and then adding to the position at better prices. Locking in profit on a small portion of the position never hurts, and reduces risk which is never a bad thing either. If this market breaks below the 300 level, then the next support is the 295 level which is the .382 of the entire bullish swing. If this market is going have a chance at pushing a new high, it needs to maintain a support above this level. A break below will increase the chances that this market will go back into a consolidation rather than retest the highs. In summary, this market is now showing a clear bearish reversal sign which is the double top along with the fact that price is within a major resistance zone. These factors point to lower prices ahead which may offer a swing trade long opportunity if a bullish reversal appears around the 315 level or low 300s. The idea is to capture an attempt to retest the highs which is a reasonable expectation based on recent price structure. Also keep the other eye on the BTC market, because any major support breaks there can work against the support scenario that I am looking for. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
33
ETHUSD Perspective And Levels: Market Must Choose.ETHUSD Update: 303 to 308 minor resistance prevents any upside progress, but the 280 support has not been taken out which puts this market in a range. Most likely price action will stay this way until the highly anticipated fundamental events are out of the way. Even as BTC almost reached 5k and retraced, this market has not made any moves that are worth the risk from a swing trade perspective. As far as day trading levels, again if you are up for that (I do not day trade these), the 286 area is supportive, while the low 300s is your minor resistance. If you have the time, patience and system to help you navigate that range, small profits can be extracted, but you seriously need to make sure your risk is small. If the 280 support breaks for any reason, it will most likely trigger more selling because of the double top that has been established at the 315 level. With that being said the 303 to 308 minor resistance (.618 of recent bullish swing) can also establish itself as a lower high since price has tested it twice without making any progress. This type of lower high is a bearish sign and can lead to the support breaks mentioned in the above paragraph and in previous reports. The lower high is not in play until the 280 area support is taken out. Often range bound markets can break out either way, it really is all dependant on the perception of the outcome of what ever event this market is waiting for. Taking any positions ahead of time in anticipation of a break out is not worth the risk. And if anything, the top of this range is a lower high compared to the 400 level, along with the 320 to 350 resistance zone (.618 of bearish swing) which has not even been touched, the bias continues to be bearish in the short term. Since I am not shorting these markets, I have no choice but to stay out and let the market decide. In summary, if you zoom out and look at this market from a broader perspective, you can argue that the current price structure is forming a lower high which can eventually become a higher low. This can be confusing and again is better left to the market to ultimately decide. Remember, there is nothing to miss out on. If the market breaks higher, there will be plenty of opportunities to get onboard. If it breaks lower, it will eventually offer buying opportunities at great prices which is in line with buying as an investment (core position). In my experience, it is always better to let the market choose because it won't cost you anything, and when conditions are clear, you will be much more prepared and more confident to participate. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
25
ETHUSD Perspective And Levels: 315 Top In Play.ETHUSD Update: Breaks support and confirms 315 double top while BTC breaks out beyond it's resistance zone and makes a new high. All the alt coins are lower on these new BTC highs and to me, a mixed environment such as this is a red flag. I have been writing about the resistance in this market and now that the 303 support (.382 of recent bullish swing) has been taken out, the double top is in play. The 280 support zone retest offers potential supportive price action, but I have no intention of getting long. If you have been following the levels I have been writing about, price has been reacting nicely off them which can offer day trade opportunities for those who are into that. As for BTC, perhaps the community of participants are buying the rumor and selling the news, I do not know, but I can tell you this: The relative weakness of the alt coins is a red flag. What happens if BTC sells off? Are they going to revert back to their inverse relationship now? This kind of mixed environment urges ME to stay away even more. Like I wrote about previously, markets pull back, and I will wait for the pull back. It may not be steep since BTC has cleared a major resistance zone, but I can at least reevaluate the structure to determine a reasonable level to retest. The fact that ETH has retested supports while BTC pushed highs I interpret as a sign of weakness. Now that the double top is in play, I have no intention of buying the upcoming supports which are the 291 to 286 area. If 280 breaks (which has been a great support for day trading) then I will be watching for price to work its way back into the 260 area. Also the 303 to 308 area is now a minor resistance (.618 of recent bearish swing) and any attempt back up to 315 may be blocked here. I do realize that these markets are structured differently than the traditional financial markets, and that relationships between these coins change quickly so I am not going to stress over trying to figure out why they are behaving this way. Here is what I am going to do: Continue to evaluate this market for the next significant reversal upward. I do not expect that kind of price structure at current levels. And since BTC has demonstrated strength, I will look for a significant support level to measure risk from in that market also, but I am NOT going to just jump in and buy. I am highly suspect of this movement and prefer to wait for lows before I take any risk, not highs. Remember the first time it went to 5k? It then retested 3k. What I am curious to see is how ETH reacts during the next BTC correction. In summary, the BTC move is very interesting, but not attractive in the least bit within the rules of my plan. If I wasn't willing to take risk at lower levels, I am certainly not willing to take any risk at current levels in either market. The fact that the alt coins sold off during this rally presents a mixed market, and mixed markets are ones that I try my best to avoid. Nothing goes up in a straight line, and BTC is no exception. Greed and fear unfold in the same patterns over and over, it is just a matter of waiting until the conditions match the criteria of your trading plan. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
28
ETHUSD Perspective And Levels: More Bearish Signs.ETHUSD Update: 315 level double top is now generating a pin bar which still has 12 hours before is closes so it can change, BUT again just like BTC, it is worth noting because of the potential bearish trigger that can lead to real selling. There was a nice move from the 286 support zone (that I wrote about previously) back up to 315. I haven't looked, but I am willing to bet there is a lot of chatter about "ETH Going To Moon!", and it's not happening. There is no moon, instead, there is a large resistance zone just above at the 320 to 350 area (.618 of recent bearish swing). This market has not even made it into that zone, and instead is in the process of forming a pin bar at a previous turning point which can solidify into a double top. 305 is the current low of the pin bar (but that number can be lower by the close of the candle). When this period closes, and the pin bar is still present, what ever low is in place at that time will be the short trigger. Then IF the market breaks 280, that will confirm the double top which would signal further weakness ahead. No moon. Just like BTC, the bearish argument keeps building: Price has not even entered the major resistance zone of 320 to 350, price has possibly formed a double top at 315, possible large time frame pin bar forming, plus the 315 level is a lower high compared to 400. If I were shorting these markets, these would be the signs that I would need to see. The key is in the confirmations, just like in BTC, 4104 needs to be taken out, in this market its 280. The appearance of a bearish pattern like a pin bar or a double top alone is not enough. Confirmation implies the selling is significant and is likely to continue. If 280 breaks, there is a .618 support zone (of recent bullish swing) at the 276 to 266 area where price may hesitate, but coming from a double top and lower high, it is reasonable to expect supports like this to break, which can take price back to the 243 to 223 support zone (.618 of entire bullish swing). Like I have written about previously, often the signs are in place before the market is surprised with significant selling and there are many signs at the moment. It is just a matter of a bearish catalyst. The 243 to 223 area is an overlapping support zone and if price manages to retest, I am curious to see how it reacts since a C Wave would be in progress which can complete much lower. Any failed lows in this zone can possibly lead to a large double bottom or higher low formation, and that is something I would be interested in. Keep in mind this process can take time (days). According to my extension measurement, Wave 3 of C (which should be the next wave) is likely to complete around the 267 area (1.618), while Wave 5 of C can push to the 239 (2.618) area (this is based on the proportion of the of the price structure). This is just a possible scenario and is not a consideration until the bearish triggers I mentioned earlier are in effect. In summary, these markets have been very slow in terms of swing trading, but bearish signs are beginning to accumulate. I am using this information to justify staying flat since I do not short these markets. There is plenty of action on the smaller time frames which I encourage everyone to participate in if you have the time and well thought out plan to guide you. My analysis can still serve as an overall context, especially for the levels. My plan is to stay out of any swing trades until this market presents a situation that shows clear potential to the upside for a reasonable amount of risk. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
13
BTCUSD Perspective And Levels: Buyers Are Back? Not Yet.BTCUSD Update: 4104 level holds while price pushes back into resistance zone only to stop at the 4352 to 4407 minor resistance (.618 of recent bearish swing). Is this price action bullish? Not on the bigger picture. The price rally that occurred near the 4104 support level that I wrote about in my previous report is the type of move that is great when trading smaller times frames, but the problem with the bigger picture is: it's right back in the middle of the 4203 to 4548 resistance zone which makes it still too risky in terms of getting long for a swing trade. The bounce off of 4133 is certainly worth noting as a higher low which is a sign of strength, but without the higher high (follow through), it is really nothing more than noise at the moment. It is very possible that this market is beginning to build a more bullish foundation which will be confirmed IF price can produce a subsequent higher low followed by a push to the 4548 break. In that scenario, I will have enough evidence of strength to BEGIN to look for a new swing trade long. If you are day trading, that long can come sooner, but the reason why I wait is because the upside potential needs to be clear and at the moment it is not. 4104 is still significant and if price breaks below, I will consider that a major sign of weakness. Often what happens in a situation like this is if price does not follow through, the new longs will create even more selling momentum as they scramble to get out. This kind of price action can provide the momentum required to break the 4104 support. The market has to choose. In summary, these markets are slow and require a decisive move one way or the other. On one side, it is possible that the lack of selling momentum (4104 held) can be interpreted as strength, but without follow through, it is not enough because the risk is still too high. What I would like to see for a long is the break above 4548 so that I can look at this resistance zone as a new support. That would change things entirely, but until that happens I have to stay out and watch. A retrace back to 4104 and possible break will add to the bearish argument even more and I will stay flat unless extreme prices are retested. My plan is simple, I know what I need to see, and if the market doesn't present it in a way that offers reasonable risk according to my plan, then I do not have to take any risk. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
17
BTCUSD Perspective And Levels: Watching For 4100 Support Break.BTCUSD Update: Selling momentum is beginning to reveal itself, but is not confirmed until 4104 (.382 of bullish swing) is taken out. Smaller time frame price action has been very misleading because it looked bullish on its way to 4400, but the bigger picture always carries more weight, and it is not bullish. As a swing trader, the bigger picture is key for decision making because that is the magnitude of risk and reward that will affect my outcome. With that being said, the 4104 support break is required to confirm that the selling momentum has something behind it. This is not a sell trigger, it is a confirmation that prompts me to look for the next lower high which is more likely to follow AFTER the support break. If this support holds, I will interpret that as price is still lingering in a very tough resistance area which presents high risk for swing trade longs. As time goes by (and no major price reactions), it is possible for this market to build a supportive base in this area that can eventually lead to higher prices, but until I see any signs of that, I have no intention of getting long. The 3865 to 3706 (.618 of recent bullish swing) is the next support area where price is most likely to react upon a retest. The reason why I will not be looking for longs here is the same, risk is too high on the swing trading time frame especially since this support zone is more likely to break. (Lower highs often lead to lower lows). So when will I begin looking for longs on the swing trade time frame? Either we break out above 4550, and on the subsequent retrace I will be looking, OR the more likely scenario which is the C Wave unfolds and completes at much lower prices, followed by new supportive structure. Also as I have written about before, IF the C Wave asserts itself and we get some low prices, I will also be buying as an investment, which is separate from a swing trade. In summary, if there is any lesson we can learn from the current market conditions, it is the value of patience. Some traders have written some excellent comments that show their understanding that these markets will always be going higher and lower and always be presenting new opportunities with relative risks. If you are anxious for action, you can always day trade, but you have to have the plan, the time and attention span. If you are looking to capture broader movements without being glued to a computer screen all day, then you have to accept the amount of patience that is required. Think about it this way: Patience will not drain your capital. If you miss "the move", you will still have your capital to participate in "the next move". Movement and opportunities are infinite, while your funds are not. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
17
ETHUSD Perspective And Levels: A Double Top Appears In Zone.ETHUSD Update: Minor double top within projected resistance zone of 301 to 307 area while BTC hardly pulls back, but is still stuck within a much more significant resistance zone also. Like I wrote about before, the selling structure has establishing itself, but there is no real catalyst to get these markets moving. Many people are asking why, or trying to find some kind of news or information to help explain this price action. This double top formation will be confirmed once the recent low at 280 is taken out. There is also a minor support zone at the 286 to 291 (.618 of most recent bullish swing) is worth mentioning since small time frame reversal patterns can offer day trade opportunities in an area like this, but that is up to you and your trading plan. Based on the current structure, these supports are more likely to break rather than show reversals and are not worth the risk for any swing trades. Price may hesitate at the current supports in the 286 area, 280 and even in the 260s, but the reason why I will not consider any reversal patterns for a swing trade is because in this context of a lower high, these levels are more likely to break. I know that many participants, especially if they are in positions, scour the internet for any piece of information that can explain the current price action while price is telling us everything we need to know. When the balance of order flow is made up of sell orders (and that includes the hidden ones on the exchanges), over time, this activity will express itself in patterns. Patterns like the double top, or failed high. Often these patterns will appear, days or weeks before some big news surprises the markets and that is when most people notice the obvious selling and think it started with the news event. The signs are present now, like I have been writing about, the only thing that is missing is the spark which can come out out of nowhere. Besides this short term price action, I have been writing about the wave counts in both BTC and ETH markets, which appear to be at a bearish turning point also. The only thing that is holding these markets up is the persistent BTC strength, but this strength is no where near the same compared to how it was behaving the first time up to 5k. In summary, the situation has not changed much except for an appearance of more bearish price action. The double top and lower high formation warn of oncoming support breaks, especially if there is something motivating the order flow. Like have written before, I am not taking any swing trade positions in this environment because the risk is too high compared to the potential reward based on my swing trade plan. It is just a matter of waiting, and waiting does not require any risk. Like they say flat is a position. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
15
BTCUSD Perspective And Levels: Key Resistance Zone.BTCUSD Update: 4212 to 4548 resistance zone implies limited upside and the possibility of a being the price area where a broader Wave C can begin. In my previous report about ETHUSD, I wrote about a Wave B high at 315 which once established, prompted me to stay away from any long swing trades. The bullish structure is not that bullish and overall it is a lower high. I checked the BTC chart as well and the current resistance adds to the bearish argument even further. In this chart, I want to show the Elliott Wave count similarity, potential levels of where this count can lead price, and confirmation levels to know if this market is most likely in a bearish C Wave. Keep in mind, for those of you who are less experienced and expecting the certainty of a weather forecast, you need to understand, technical analysis does not provide any certainty. It provides CLUES as to what scenario is more likely to happen compared to a population of countless scenarios. By having an idea or "Perspective" of what this market can do, you can better prepare IF the market chooses this scenario. The goal is to simplify the decision making process to something like, "If market does this, I do that. If market does not do this, then I do nothing.". Reacting to the market based on impulses, or how YOU interpret news, is completely irrelevant to the market and is the best way to achieve inconsistent and random results. Presently this market is fluctuating in a major resistance zone. 4212 to 4548 is the .618 of the recent bearish swing. Price action and short term structure may appear bullish at the moment, but the resistance, on top of the wave count seriously counter the bullish argument. This price area is a very convenient location for a B Wave to peak which presents a great deal of risk for any new long positions. The reason is the C Wave has the potential to retest the low 3000s and even the low 2000s. Of course in order for that to unfold, there will be strong catalyst or series of catalysts in the market. Often the bearish signals are in place before the news comes out. The level that I am watching to confirm the bearish momentum is 3976 (.382 of most recent bullish swing). A break below that, and the next support to test is the 3481 to 3260. How will I use this information? First, no swing trade longs in any alt coins, even if reversal patterns show up at support levels. And IF the market offers the opportunity to buy at extreme prices like 3000 or below, I will be looking to buy for the long term. There is no precision to that, and now way to know where the bottom is (this is an investment, not a swing trade). Now if I am wrong, the market will have to prove its strength by pushing above this 4212 to 4548 resistance zone. IF this happens, THIS IS NOT A BUY SIGNAL. This price action simply serves as a clue that points to further strength. In that scenario, I reevaluate and find the next best support level. I do not care if price has to go up 300 points without me to prove itself. If you find yourself caught up in the idea of "I'm missing out" then you still have a lot to learn about trading. Also if you are looking for "action", swing trading is probably not a good style for you. In summary, as hopeful and hype full as people are at the moment with this market flirting with the 4200 level, the bigger picture presents a different story. Elliott Wave shows that there is more potential of a B Wave completion, followed by a bearish C Wave, rather than a retest of 5000. A break of the 3976 level will be the first confirmation, followed by a retest of the 3481 to 3260. If the market chooses otherwise, it will have to clear 4548 in which case I reevaluate and look for new support levels to work with. I always keep an open mind and do not worry about what I am "missing out" on. I simply analyze the clues that appear in the price action, and adjust as new information becomes available. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
54
ETHUSD Perspective And Levels: Not That Bullish.ETHUSD Update: 312 level compromised, but price sold off right back to 300. As I wrote about in my previous report, double tops are not always precise and based on this price action, this can be identified as a double top variation. A double top is a bearish sign, especially on this magnitude. On top of that, the current wave count is not bullish at all, which limits the upside potential of these markets, and I will explain why in a moment. People have asked me why I switch back and forth from using Elliott Wave. I don't switch back and forth, I am always evaluating the wave counts, but when they appear conflicting or confusing, I am not going to write about them in order to maintain clarity in my reports. I choose to present information that makes sense and provides clear insight. The short term price action since the 198 bottom has been conflicting, but obviously bullish. Great for day trading because you limit your risk to small moves, but that kind of evaluation and risk management is up to you. My reports focus on swing trades and taking them when the factors line up to offer the most attractive reward/risk based on the criteria of MY trading plan. It can go without a trade for days, as many of you have noticed, but it is more important for me to control risk, rather than jump into any move just because the market is moving. When this market peaked at 315, I was evaluating the next support levels which are: 292 (.382 of bullish swing) and 276 to 266 (.618 of bullish swing). Then I zoomed out to get more perspective, this is when I realized this market is not as bullish as it appears. The 320 to 352 resistance zone (.618 of bearish swing) is a major area that needs to be cleared to prove this market is not completing a Wave C of a broader B and BTC has the same situation. B Waves are very tricky, and I know some traders have shared charts with the Wave A defined properly, my count was slightly off. In light of this wave count, the sluggish price action makes more sense now. Even if you don't count the waves, the broad resistance zone limits any long swing trade potential at these levels. Especially after the kind of price failure off of the 312 level. If you want to day trade the bullish fluctuations on smaller time frames, that is up to you. As far as potential for swing trades, risk to clearly way too high. I do not want to get long at the highs of a corrective Wave B when the next wave is likely to be the C Wave to complete the corrective structure. This can take prices back to the low 200s at least. On top of that, we have the broader double top in play which looks to be establishing a lower high. All bearish signs. In summary, the recent bullish price action has been slow at times, but looked like the buyers were returning , until you zoom out and see where this market is on the road map. The confirmation that the bearish C Wave is in play would be a break of the 276 to 266 support zone. If this bearish wave asserts itself, there will be plenty of day trading opportunities to get short, but again you have to have your own plan for that. Based on the current price structure, this is the scenario that is more likely to unfold. How will this help me? I know not to expect support levels to hold, and I know that bullish reversals will offer limited potential. In order for the market to prove otherwise, it needs to clear the 320 to 352 resistance zone. Comments and questions welcome. Also special thanks to the Tradingview community again for your support, I am now over 3K followers.
BITFINEX:ETHUSD
by MarcPMarkets
23
ETHBTC Perspective And Levels: Lower High Offers Important Clue.ETHBTC Update: This market serves as a good indication as far as where these coins want to go and it doesn't look bullish. The relationship helps to clarify the direction, but not the magnitude based on results of the recent price action. This market is important because it is how a large number of investors are committed to ETH. As you can see, the recent upswing, although small, correlated well with the ETHUSD retest of 300. The price action in this market reversed at the .07783 to .08092 resistance area and has established a lower high which is a bearish sign. Lower highs often lead to lower lows. And ETHUSD failed to break 300 which should not be a surprise based on what this chart is showing. When the coins sold off a few weeks back, this pair tested the .06674 for the fourth time and is now poised to test it again. The value of this information is not in the range of price movement, but instead the levels. A break of the .06674 support implies weakness for the ETHUSD pair which can be helpful information, especially when trying to filter buy signals. Remember people in this market are buying ETH with their BTC. Both markets pushed significant lows at the same time against the USD and the price action in this pair was somewhat stable because the rate of change between the two markets was similar. They were both selling off fast. The fact that this market held the support during the sell off could have been used as a sign that the selling, as extreme as it appeared, was limited. That is how I will be using this chart if the coins retest the lows again. So if this market breaks the .06674, and pushes to a lower low, that means ETH is weak and will probably be breaking support levels also. And if this market manages to bounce off the support level again, that would imply strength in the ETHUSD market. In my opinion, this market offers more insight into the price action of the ETH market along with a valuable heads up. I will be watching the .07125 to the .06938 minor support (.618 of recent bullish swing) to see if price can reverse. If it can, then I want to know: Is ETHUSD at a projected support level? Is it showing any reversal patterns on a smaller time frame? If yes, then if the risk makes sense, I am open to the possibility of taking a long swing trade. If the minor support in this market is compromised, then I don't care what ETHUSD is doing, I will not be considering any swing trade in that scenario. The market will decide and since there is a lower high in place, the bias is leaning toward the support breaking. In summary, this market is good to evaluate every so often to see what clues it offers in terms of the relationship between the ETH and BTC markets. A large number of investors own ETH in terms of BTC and levels and patterns on this chart can give us an idea of how each respective market is more likely to behave. Since price is poised to break below a very significant support, I am very curious to see how each of the coins behave in terms of the USD. If anything, this chart is saying the bearish momentum is still present, and any break of resistance will most likely fail which adds to the high risk argument I have been making in my previous reports. Comments and questions welcome.
by MarcPMarkets
20
ETHUSD Perspective And Levels: 300 Break Or Fake?ETHUSD Update: Another failed attempt to break the 271 to 291 resistance zone which does not support the bullish argument in terms of price action. If this market has any real buying, the proof will be a sustained break of the 300 weekly high. If price does not break above the 300 level in its current attempt to rally, it will have sucked in liquidity for the wrong reasons. Any break of a minor support like the 275 level will trigger increased selling because there will be more longs caught in this market. This is usually what happens during false breakouts. The key levels I am watching are the 251 low and 300 high. These levels will be the low and high of the previous weekly candle once the new weekly candle opens. A break above the 300 level will imply further strength which will have to be supported by some kind of bullish price structure while a break below 250 means price is more likely to retest the lower support zone. No matter what kind of hype you read, keep in mind the alt coins are still following BTC until they prove that they are not, and that proof comes in the form of order flow, not words and opinions or even news. If BTC sells off and retests previous lows (I wrote about this in my previous report) this market is most likely not going to break any highs. Until this market proves otherwise, I am sticking to my plan for the two scenarios that I have written about previously: 1. Wait for extreme low prices for long term (yearly hold) and 2. Wait for reversal within the 237 to 219 zone for a swing trade and conservative target. If the market does not want to conform to my criteria, that's fine with me, because that means I don't have to manage any risk either. I am evaluating from a swing trade perspective and that does not mean there is no opportunity at all. For more advanced traders, you have the 267 to 260 minor support (.618 of recent bullish swing and just above .382 of previous bullish swing) which can be a good area for a short term reversal (like the one that occurred at the 250 level). Like I wrote about before, these type of trades require a ton of attention and very well defined trading plans. Certainly not the type of trade for someone who is new. In summary, this market is stuck within an established resistance zone which increases the risk for any bullish longer time horizon trades. I am still flexible and open to the idea of the market breaking higher, but it has to prove itself in which case I will adjust and look for higher probability setups AFTER it provides the price structure that I need to see. A sustained break above 300 will be the first sign. Otherwise I am just going to stay flat and be prepared if the scenarios I outlined in previous reports materialize. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
21
BTCUSD Perspective And Levels: How Low Can It Go?BTCUSD update: Price establishes lower high at 3808 and is poised to push lower, but the question is how low? I am going to present some possibilities based on Elliott Wave and Price Extensions. This chart further explains why I will not go long ETHUSD at current prices for a swing trade. In my previous report I talked about the double bottom on the 4 hour ETHUSD chart and price pushed back up above the 270 resistance. Some may wonder, why wouldn't I talk about that as a trading opportunity? The reason is, that particular price action does not fit within the criteria of my swing trading plan. That doesn't meant it can't be considered as a smaller time frame trade, like a day trade, but that is up to you. I do not write about day trade opportunities and setups because there is too much complexity and adjustments that have to be made for that type of trading especially to report in a timely manner. My goal here is to provide analysis that offers perspective and to help you make better decisions in general, but the emphasis is on swing trading. With that being said, I am waiting for a setup in ETHUSD that can get me in for a broader move, and since I am not shorting these markets at all, that means I can only wait for a long setup in the right environment. Since all the alt coins are following BTC, I am using this market to provide clues for timing such a trade. In terms of Elliott Wave, this market has established lower highs at 4120 (Wave 4 of C), and at 3808 which may be the beginning of Wave 5 of 5 which is likely to complete the corrective Wave C. A measurement of the current price structure reveals the 4.618 extension around the 2824 area which is located within the 3024 to 2497 support zone (.618 of the entire recent bullish swing). Also it is important to note that the 3003 level is the peak of the broader Wave 3 that was established in June of this year (see weekly chart). A retest to slightly lower levels makes sense and would be a convenient area for a completion of the corrective wave structure. (It would also be a very large double bottom relative to the 2980 low). This scenario can take a week or more to play out and will require a significant catalyst or series of catalysts to drive the required momentum. I will be watching for a break of the 3490 weekly low, which is the first sign that this extreme low scenario is more likely to unfold. So how is this information useful? For one, I will not buy anything at the current price levels. If price is going to build a bullish argument from here, it needs to take out the lower highs and establish a clear bullish structure. That means 3955 needs to be taken out, followed by a higher low. There may be fluctuations that offer opportunities on smaller time frames (like in ETHUSD), but until the market shows clear signs of resistance being taken out, on the swing trading time frame, this price action doesn't offer attractive reward/risk. In summary, make sure to separate your perspective by time horizon. Big picture and small picture can be very different and present relative opportunities along with their own degree of risks. As a swing trader, my risk parameters are clearly defined and if the market does not align with my requirements, I simply stay flat until it does. This market, the leader of all coins, still has room to test lows and the price structure to support that scenario. Using this information helps shed light on the fluctuations in the alt coins that may look more promising than they really are. If strength intends to come back to this market sooner, it will prove itself through the appropriate price structure and I can adjust from there. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
15