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Crypto Update 12.13.21
I apologize for bombarding everyone with 3 emails today - but each of today’s 3 posts are updates to posts that I wrote 1-2 months ago.
In a way, this crypto post is related to this morning’s post on the inflation trade. BTC has been trading a lot like the commodity ETFs:
In my last crypto update (Nov 19), I wrote that while BTC was failing to hold its breakout above the Mar-Apr highs, ETH was still holding.
Now, a month later, we’re still waiting on resolution from ETH.
Elder Impulse candles (an indicator that is very similar to MACD) have done a decent job of riding ETH's trend. ETH needs to recover by the end of the week, otherwise we’ll get our first red Elder candle and a breakdown of key support.
If crypto fails to recover this week, where might this sector find support?
Below are charts for 4 of the top-7 cryptos.
BTC Weekly. Strong support lies in the 41-42K ballpark.
ETH Weekly. A 50% retrace of the July-Nov rally would take us down to about 3,300.
SOL Weekly. Support lies in the 125-area.
ADA Weekly. Well-defined support lies a little above the $1.00-even mark.
Overall, this would give us a further pullback between 10% (BTC) to 18% (SOL).
In terms of leadership within this space, here’s how things stand currently:
Similar to the tech sector, the small-cap names have gotten crushed while the larger coins (BTC, ETH, BNB) have held up relatively well.
That’s all for now.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.