Crypto Channel Failure? Looks like it.
This kind of thing changes everything. Momentum is lost, upside targets are lowered, expectations are appropriately adjusted. By the charts, crypto is in a correction at best, reversing lower at worst. The huge momentum seen in the past 3-4 months is clearly slowing, and the trend has been put into question.
Having said that, I need to make very clear that I am NOT talking about the long term. The long term is very much intact in my opinion, but we may need to ride out a very deep and painful correction first (“may need to” is also misleading: sooner or later we WILL see that correction - it’s not a question of if, but when).
As I see it, intermediate term we have two primary possibilities: 1) correct sideways and then move higher, or 2) continue rolling over. Of course there are other possibilities, like a rocket shot higher or a crash straightaway, but those are more outlier in nature. Nevertheless, they can still happen.
The keys for traders and investors alike are identified support/resistance levels, trendlines, etc., and to trade/invest accordingly, for example, if the crypto complex loses the horizontal range, then it would be a good idea to hedge and appropriately adjust one’s book or portfolio, just as if we were to break higher, one might add more longs . . . all the while keeping in mind those old channel lower boundaries, etc.
Bitcoin, on the other hand, presents a slightly different, and more positive, picture. Here the horizontal trading range is completely absent and the dominant uptrend channeling looks intact. 2370ish is acting like a key S/R level however. In any event, crypto’s best salesperson, aka BTC, looks relatively strong and could be indicating that this cycle has a bit more to go.
One last takeaway: if this does lead to continued upside, it’s certainly not looking like an exact continuation of what came before, that is to say, the “all boats rise in a rising tide” maxim will no longer hold and it will become much more of a stock crypto picker’s market.
The easy stuff is over. As if ever were easy. 😨
Please leave your comments, input, questions, etc., below!