Today is the 5th January 2021, let’s get another market update released, and talk about some of the recent moves we have seen across the board. I hope this newsletter helps to explain in more detail my current bias for PA and where I think we could be heading over the coming days, weeks, and months!
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So this week was the week, Ethereum finally surpassed $1000 and it’s pretty crazy in terms of volatility and price action right now, the whole market just seems to be moving higher and higher and I wanted to write this newsletter just expressing some of my opinions on where we could be heading next…
The first thing we need to do is just take a look at ETH right now, as it seems to be leading the market after performing incredibly well over the past few days. You can see from the chart that is below that once $645 was broken and flipped into support we pretty much easily found momentum to target our next level of resistance which was around $900, a key level for price action in the macro outlook.
Also shown in the chart above is the wick into $1100 which I think for most was very unexpected and crazy to see, but once $1000 get breached then euphoria can step in and really make things crazy in terms of momentum and price action. Currently, price action is resting around $1000 which would be expected due to the amount of psychological resistance/support at this level. I would really be expecting bulls to defend this level but once of if it does get broken then we will see some pretty volatile spikes to the downside. Next key support to the downside is $910 level.
The same chart on the daily timeframe showing two wicks into and above that $1100 region before pulling back lower, the second wick above was due to some very bullish news about the US, and how they will start using stablecoins such as USDC. I would highly suggest anyone who has not seen the news to go and check that out as its probably one of the most important pieces of news that we have seen in the crypto space over the past few years. This news caused a pretty volatile spike to the upside which we were careful to catch in the NFT newsletter telegram. By the end of the day, price had pulled back down after we took profits and now it seems as though we are just ranging between $990 and $1040 again, a range which PA seems pretty comfortable with. A break in either direction will be pretty volatile for price.
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In terms of LTF momentum for ETH right now it seems as though price needs to get above 1050/1060 to find some real momentum to the upside until that happens then likely we either continue this range of even price can trend a little lower in the midterm. I still think we see need to see price retest some levels in the 800’s before attempting to cracking ATH levels, but that’s my personal opinion & bias right now.
I think the next leg of ETH will be tied to BTC and where that wants to move, currently stuck just below $32,000 (key region) that needs to be broken and flipped into support before we can be bullish in terms of LTF charts. If we take a look at the chart below this is the current LTF setup for BTC, you can see that there is this pretty large range ahead that currently is holding as resistance expecting price to move down from here unless bull can quickly flip and claim this level as support.
Similar to ETH I think in the short-term it’s hard to imagine bulls finding the power once again to go back to ATH levels right now, without some type of move to the downside to cause some panic and fear with high-risk positions and those with weak hands. I think that there are some levels below $30,000 that are very key for BTC to retest, these being levels such as $28,000, $26,000 and possibly $24,000.
I’m pretty sure nobody really wants to be selling BTC or ETH here due to the fact they have a fear of missing out on future gains, but honestly, we are up over 450% over the past 11 months and even in the short-term I think ETH has not seen a single red candle on the daily for around 6/7 days. I have trimmed some profits from ETH here, not much but a nice 5/10% trim is enough to get excited about buying back in lower.
We have waited over 3 years to see explosive action like this so personally, I enjoy trimming positions and getting ready to buy back in lower, it’s not as if this explosive action has just started, this has been happening for weeks and weeks even months and we have held our positions so well. So personally trimming positions here and waiting to see some more low timeframe / mid timeframe pullback into the levels mentioned above. I think the overall year ahead for both BTC and ETH is incredibly strong and I it could be very likely that ETH is trading above $3000 this year, so keep that in mind when trimming your positions. Try to weigh all your options and strategies, both to have exposure to future gains and also prevent yourself from getting hurt on a PB.
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