Cryptocurrencies experienced a sudden flash crash yesterday with losses topping over 300B$ in less than 24 hours. The major coins are now testing the 50 days moving averages, with technical analysis pointing towards the bearish side.
Ourselves at E-Club Trading were continuously emphasising that one needs to be prepared for a market correction and this is the reason why we were having in place tight stop losses (at day’s pivots, 8 & 21 EMA’s) in order to preserve the extraordinary returns accumulated since mid-July reversal. This has proven once again a very successful approach saving us and hopefully our followers +- 15%. We are now 90% cash waiting for the dust to settle and observe the trading patterns for the next period ahead. Catching a falling knife is a major risk that we try to avoid. Furthermore, we are content with the +100% profit accumulated since July hence there’s no purpose in rushing in immediately.
Please find enclosed a couple of charts to keep in mind for the trading day:
Bitcoin is trading just at the 50 days moving averages at 45200$ at the time of writing. This level is one major support while yesterday’s low of 42900$ Is the next one, which if tested, expect a further possible drop. 47369 is today’s high which we account as first resistance. See how it reacts around these levels for market sentiment. In the meantime, on the fundamental side, El Salvador President decided to buy « the dip » by acquiring 150BTC.
The 2nd cryptocurrency by market capitalization reflects the same gloomy outlook as Bitcoin. Ethereum is trading at the time of writing at 3300 below both the 8&21 EMA. Yesterday’s low was at 3015$, below the 50 EMA, which in case you want to try benefiting from the price reduction should represent your stop loss. 3355$ and 3541$ are the key resistances for the day.
Remember, the market will be here tomorrow as well, so there’s no harm in sometimes being on the sidelines and observing the market sentiment for further direction.
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We grow together.
E-Club Trading Team