Ethereum Needs to take a Breather (Weekly Overextended) - Short
Updated
Ethereum run has got parabolic on the weekly. RSI from the lows all the way to above 90 and over the last few weeks so have the micro alts, increasing hundreds of percentages. it almost feels like we are in the cusp of a revolution and that the world will be decentralized and blockchains will be everything tomorrow. Celebrities from Linsey Lohan, Snoop Dogg, Elon Musk and many others have been casting their nod of approval for various coins as well. The extraordinary gains has led to a media frenzy as well where everyday we are talking about how institutions are going to be pouring billions into the space. Sounds great, but my friends; these are red flags.
First of all, let me just say I don't think this bull cycle is over. I believe that we'll have some ways to go and that blockchain will be revolutionary. But it ain't going to happen overnight and when you see so much fomo, you have to be cautious. Secondly, looking so many of these coins like Ethereum and Binance at or near record high RSIs on the weekly is another signal for caution. While I don't take short positions, I would take some gains off the table here.
Ethereum is a ascending triangle pattern that is really tight. The pattern is typically bearish, and given how extended we are without any real pullback, I think odds of a 20 - 30% pullback greatly favor the bears in the short-term. Trade according and never with money you can't afford to lose. But this isn't where you should be buying, the time to buy was 2 weeks ago. Right now it's FOMO.
First of all, let me just say I don't think this bull cycle is over. I believe that we'll have some ways to go and that blockchain will be revolutionary. But it ain't going to happen overnight and when you see so much fomo, you have to be cautious. Secondly, looking so many of these coins like Ethereum and Binance at or near record high RSIs on the weekly is another signal for caution. While I don't take short positions, I would take some gains off the table here.
Ethereum is a ascending triangle pattern that is really tight. The pattern is typically bearish, and given how extended we are without any real pullback, I think odds of a 20 - 30% pullback greatly favor the bears in the short-term. Trade according and never with money you can't afford to lose. But this isn't where you should be buying, the time to buy was 2 weeks ago. Right now it's FOMO.
Note
A little dump once ETH broke under the wedge as expected. Hopefully you took some profit on the way down. Last 12 hrs was a very nice bounce, fully recovering to levels prior to the dump.Not surprising given that it's the 1st correction since a long time, so all the folks that's bee waiting on the sidelines piled in. Key now is to watch when the 4hr tops out. If bear volume picks up again like yesterday, it'll likely go even lower this time around.
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Still bearish Ethereum but like the previous dump, I'd take some profit to lock in a win even if it reverses. Wouldn't be surprised we down in the 1600s pretty soon though.
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