Disclaimer: This is not meant as financial advice and is for entertainment purposes only.
Over the past 10 days I have been calling for a retest of the 12 period EMA on the daily chart . Any time that we get too far away from that moving average a reversion to the mean is very likely. I mentioned that it could come in the form of a sharp bounce, or it could come through days of consolidation. The latter option appears to be the preferred route.
The EMA has been acting as strong resistance over the past 4 days. I think that the bulls need to break through $6,750 before the weekend, otherwise another downturn is highly likely.
We just had a double top on the 4 hour chart which indicates that the next drawdown could be coming sooner rather than later.
We have been trading at a major resistance cluster over the past few days which will be coming to a head in the next 48 hours. The resistance is coming from the downtrend that started on 5/6 (red), established horizontal (white) as well as the EMA mentioned above.
Furthermore we are coming off a shooting star and a hanging man on the daily chart , both of which are good indications that this bounce is exhausted.
Over the past few days I have been suggesting building a short position and/or selling spot at the current levels of resistance. My strategy would be to start with 33% - 50% of your overall position right now and then add at $6,950 - $7,150. If we do not get to $6,950 then I would add the rest of your position upon a new swing low below $6,300. I am short ETH:USD and ETH:BTC. I believe that shorting alts vs USD has the greatest potential ROI and shorting alts vs BTC comes with the smallest amount of risk. My targets of $4,975 for BTC and $300 for ETH remain in tact and I plan on holding onto my short positions until then.
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