Bitcoin's spring rise broke it out of the upwards channel it had been in since the beginning of 2015. We are now approaching a fork in the road.
You can see the breakout happened at the beginning of May when Bitcoin rose sharply to about $3k. Since that rise, it has been slowly moving downwards in a triangle pattern.
A closer look at the fork in the road
The edge of the triangle is coming up in about a week from today. If we break higher, we could head back up to test the $3k level. If we break lower, the next level of resistance is down near $1,800. That represents about a 25% correction. What happens when bitcoin goes down....alt coins go down as well!
I'm still HODL though, I'll be waiting to see which way we break from that triangle. I would like to think with segwit approaching, Bitcoin will move higher. But, segwit may also worry Bitcoin holders to the point of getting out of it until after Segwit is finished in August.
Ether
Ether has been in the same bullish channel since the beginning of 2017. The chart below is Ether/USD on GDAX.
Ether is approaching the lower end of the channel, with a resistance of around $250. We are now below the 50 day moving average, Ether hasn't stayed below that for long before it's next leg up.
How does the BTC/Ether chart look?
Bitcon/Ether has also been in the same channel since late 2016.
We are approaching the resistance in that channel as well, with the short term resistance around 0.104 BTC per Ether. The Relative Strength Index (RSI) has done a great job of finding bottoms in the BTC/Ether chart the past few months. When the RSI drops into the 30s, we seem to be at the bottom. The RSI is in the mid 40s right now, so that does make me slightly worried.
How is the ultra pessimistic @FinancialCritic trading this?
- I'm HODL and might even BUYL more Ether. But, I am worried about the number of big ICOs we just had and what those companies are going to do with their Ether holdings. If they decide to sell large amounts, we could crash through the bottom of the channel.
- I'm HODL a small position in BTC and watching to see if we bounce or break the resistance level before making any large movements.
- The BTC chart is so much more important between the two for me. BTC drags other coins up or down with it. If BTC breaks lower, then I would be looking to dump my non-Ether coins and get into only USD and Ether. If BTC breaks higher, then it's time to make it rain.
