Bitcoin got hit by a wave of selling today. A combination of panic selling and stops being hit took the market right to the long term 1×1 Gann angle. If you will recall, on 3/3/2017, in this article, we suggested that it might be a good idea to take some money off the table if you were long bitcoin.
The title of that article was that both Bitcoin and Ethereum were at resistance. We pointed out that every time Bitcoin had hit that long-term particular resistance in the past, a selloff had occurred. Well, it took a bit longer than expected (long enough to lull into a false sense of security), but history repeated, as we cautioned.
The (relatively) good news is that Bitcoin (at this writing) touched the 1×1 of a shorter-term bull setup on the 4 hour chart. This implies that the selloff is likely over.
In the same article dated 3/3/2017 we pointed out that Ethereum was also at resistance. In fact, we suggested a short in that case. That call led to a very profitable trade. However, it turns out there was another shoe waiting to drop, and the passing of time was deceiving. Panic selling coupled with stops being hit led to sharp drop today as well.
As in the case of Bitcoin, as of this writing Ethereum touched the 5th arc on a 4 hour chart, suggesting that the low is (likely) in place.
This chart is also currently sitting on support at a 3rd arc of a bear setup, and at the end of the 1st square in time, on the 4 hour chart. However, there is reason to suspect this support might fail.
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.
Image from Shutterstock.
Last modified: March 4, 2021 4:54 PM