Dear Traders,
Today is the 26th November 2020, let’s get another newsletter 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!
Daily Market Breakdown
So let’s firstly discussed what happened last night. Last night around 3/4am (my time) I updated the public telegram with a detailed breakdown of my thoughts on the current market and what type of portfolio allocation I am currently assigning. I know I had shared this information in the past over this newsletter but honestly, I just had a feeling that I should make it more public as I wanted every single person to be clear on what I think the market is going to do and where the market could be heading next.
To just summarize what was said on the telegram last night:
So in terms of allocation, as I previously mentioned I currently have no position in Bitcoin. I have been scaling out of my bitcoin positon over the past 2 weeks and honestly I am super happy to be cutting my position here. Bitcoin started the year at around $4500 and I was a buyer so honestly, $18,000 average is a great place to be cutting profifts and waiting for anything more would be a greedy decision and not the best personal decision for me right now
I really hope this message came across clear last night, as the general message was longer and did talk about how I was holding a large position in ETH and a few selective ALTS, which generally I am still happy with my entry on. The whole message was pretty much saying that I was happy with the current price of BTC at $18,000 and was happy cutting profits. Then a few hours late the whole market started crashing,
Looking at this weekly chart that was huge for this huge move to the upside over the past few months you can see that we pretty much perfectly tested pretty close to the previous ATH which is pretty amazing. Now we can see that price has rejected flipping that level into support and we are seeing the pullback that we have talked about for a while. But where will it end and how deep is it going to go…
So currently price is coming down and testing this first major support level that was previously resistance for around a week, this level is marked at $16,200 and while we did not test it directly there was a huge move down and the price was very close to testing this level. Buyers stepped in to prevent this level from being breached and the price is now trading a few % higher at around $16,880. I honestly think that price could drop a little bit lower and maybe find some major HTF support around $16,200 / $15,800 which would be a significant level to starting re-buying heavy long positions. Currently, there are not really that many shorts stacked up and I think it could be very possible that this correction could be very short-lived.
I think waiting for this currently daily close and maybe even the weekly close being rushing into any major long positions with size but you could start adding to your longs with the smaller size if you really want to start buying here.
Even though BTC has a little bit further to drop before tapping against a major support level, ETH is actually looking super interesting right now. Price is currently testing this $490 level that I really wanted to buy, so personally, I am adding a small position here with the expectation that we could drop further over the coming few hours/days. I think that the major region where ETH will find more than 50% of buyers will be around $460, this would be a significant support level to maintain HTF and this is where ‘if I was a betting man’ I would be looking for a local bottom on this correction, so many support levels around that region and just solid range to buy.
Looking at the chart above which is the HTF chart I have been using for Ethereum over the past few months, you can see the power and support that this current level is holding, I am really hoping that the daily close can be above this level at $490.
If we do end up breaking down then the next major weekly support level would be around $380, I know that’s a pretty significant price drop from where we are now but honestly, it’s just super important that the price stays above $400 on a weekly timeframe, as this has been the ‘historic’ resistance level fore the past 2 years in our bear market. Lossing this level of support would be pretty awful for price action.
I think buying $440/$460 would be amazing personally, and $490 would be the top of this range as the first major support level, I’m going to purchase some ETH here and will scale in further if we breakdown more. I think ETH is heavily underpriced right now considering we have just seen half a million tokens locked up for over a year.
Just to summarize, I think a local top could be formed on Bitcoin for the time being and I am just patiently waiting to see what happens next. I have no issues with missing any further upside moment and I think capital preservation should take priority right now over greed and euphoria. I am still heavily positions in ETH and Alts, I think capital will flow back into alts if Bitcoin can accumulate up until Christmas. - Cactus Newsletter (19th November)
I still stand behind this statement that was made in a previous newsletter and I think capital will flow back into ETH and Alts when this correction has ended and a majority of sellers are out of the picture. HTF I remain majorly bullish and 2021 is going to be an incredible year in general, I really do suspect that ATH is easily broken within the first two quarters. This correction is healthy for price action over the longterm and it’s going to be a blessing to be able to buy at these prices when we looking back on this newsletter next summer. I hope everyone reduced their exposure over the past 72 hours and I really hope both the telegram and these newsletters played a role in helping you to figure out what could happen to price.
Thanks so much for all the support on the content recently, It really means a lot. We have seen the highest growth in engagement on Twitter, Telegram, and the Newsletter over the past months and it really means a lot that I can play some role in helping people understand this complex and difficult market, even in the smallest way. <3
Thanks
Cactus