ETHBTC Continues to Erode

29 Nov 2018

It's been awhile since I've posted a public idea. I learned a lot of things that do and don't work this year, now code a lot of indicators, and do a lot of things from different angles.

This one though seems pretty beautiful and straightforward. While I'll say that you can layer this with more indicators, I think distribution and volume profile tells the story really cleanly. ETHBTC has been trading at unusually high volume in the past week. Nonetheless, it can't print a single 1h candle above the 200MA / 4h 50MA. It's perhaps even more striking given that the BTCUSD and ETHUSD pairings have in fact gotten volatile enough that they just saw a +30% bounce after the previous leg down.

In other words, ETHBTC is in a harsh downtrend, sitting at a local support, and on high volume confirming that the downtrend is intact as it consolidates. ETHBTC basically lost support in July on long TFs and has never really done more that pause its trend into oblivion ever since.

Inasmuch as coins have FA, the case for ETH has gotten progressively worse with time. Its main use case in practice was the common platform by which ICOs fundraised. The SEC has signalled extremely strongly in the past month that it views ICOs as unregistered securities offerings based on its increasingly aggressive cases against ICOs, which have now spanned to agreements with coins that are not seen as outright scams. So, that raison d'etre is dead. Meanwhile, the various scaling features on ETH don't appear to be coming quickly, talk of ETH futures on regulated markets has evaporated, and ETH is having trouble holding on to its prominence as the second largest crypto. On top of all this, there are a bunch of flailing ICOs holding large bags of ETH.


I'm not picking particular targets here other than to point out that there's an obvious long-run level at 0.023-0.024 that we'd expect to see some interest in on a retest. Frankly, I think that if BTCUSD reactivates down, we should expect to break that ETHBTC support down and make new lows. I think the November downtrend on BTCUSD and ETHUSD is currently intact on the 4h TF and above, and I believe that the takeaway from the ETHBTC chart is that you are likely better off placing a short on ETHUSD than BTCUSD right now, because there's a chance of outright collapse on ETHBTC that you also get to play.


I'm an amateur and you should definitely not consider anything I say as financial advice. I'm interested in any feedback.

8 Dis 2018

Nota

Action over the past 48 hours was, to say the least, dramatic. If you shorted ETH instead of BTC on this dump versus fiat, you indeed did better. If you didn't take profits and put your stop in profit, you then got hit with a +20-30% bounce versus fiat in minutes depending on exchange, and shorts are by definition on exchanges that offer leverage.

It bounced more or less exactly to the pivot back in the 1h/4h charts that had been previously rejecting off of, and as of this writing has not actually managed to put more than a wick above it on the 4h.

We got quite close to the absolute low from Dec 2017. Apparently a date for the next ETH hard fork got announced for January. We could see ETHBTC form its bottom in this area if the crypto world starts trying to move into ETH ahead of that - but this move may also be irrespective of the continued bear market against fiat. ETHUSD and BTCUSD wicked 4h pivots.

So, everything's at a pivot. I still have a short bias until those pivots are clearly crossed. Chart versus fiat is still ugly, and we would expect the AR bounce at bottom to actually see strong volume follow through to break through these pivots. Generally speaking, R:R is going to be massively better following the trend and buying after a break up on the first retest rather than trying to knife catch.

17 Dis 2018

Nota

We're acting a lot like we've finally found our dead cat versus fiat. ETHBTC is for the first time in many weeks consistently weighting to the upside on the 1h, and we've crossed pivots to imply mean reversion on the 4h, now around 0.028.

I'm not going to call ETH bullish here, but unless we get a very fast rejection on today's pump, it's time to look for alt pairs that have room to recover and frankly it's +80% to reach the D 200MA on ETHBTC. The last time ETHUSD had a dead cat, it went from 160ish to 240ish for +50%. I'm not interested in knife catching, but I am interested in buying a trend reversal after it's shown strength and holds on the first retest.