Fine, we hate ourselves for the title. But still couldn’t help it. Things are shaping up as we anticipated in the cryptoverse last time we spoke. The two biggest currencies – Bitcoin and Ethereum are continuing their major moves. Both are in the midst of major edge-to-edge trades on the 1D Ichimoku Cloud with Ethereum leading the way.
ETH – GOING FOR GOLD IN THE KESSEL RUN
Ethereum has been on a tear recently as mentioned in the last post. On April 29 it closed in the cloud on the daily on the USD pair and meandered for a couple of days.
Then it printed that classic dragonfly candle and shot up. What was it waiting on? Well, remember how we discussed looking at both the USD and the BTC pairings when trading crypto? This is a great example of why.
Here is the BTC pair during the same time period.
As Josh Olszewicz (aka @CarpeNoctum on Twitter) points out when he talks about the Cloud. The point at which there is what is known as a Kumo Twist on the Cloud is where resistance/support are weakest. This means the probability of a major move is more pronounced at that time. And that is precisely what happened. Once price hit that area of the Kumo Twist on the ETH/BTC pair it shot upwards, rising almost 24% over the past 2 days with no signs of stopping from a TA perspective.
The other TA factor which is quite bullish is we have seen both a TK cross on the Cloud and a 50/200EMA cross on the daily at the same time.
As @CarpeNoctum says – number of times we’ve seen this happen = 0.
# of times i’ve seen TK and 50/200EMAs crosses occur on the daily chart at the same time: 0 pic.twitter.com/THSBZiVS4S
— #33kByJuly2018Moku (@CarpeNoctom) May 2, 2018
From a FA perspective however there is one very big potential fly in the ointment with the upcoming SEC meeting on regulation of cryptocurrencies which engaged in ICO’s. That meeting will be held on May 7. If ETH is deemed a security it could be absolutely disastrous and we would expect to see the crypto markets react similar to the MT GOX event which brought on the 2014 crypto winter. We would expect to see a $400 red candle on the daily (or more) if this happens.
If ETH is not deemed a security then all TA and FA points to rapidly rising prices and ETH taking a shot at price parity with Gold before too long (roughly ~$1,300 at the time of writing).
BTC – Following ETH TA Lead
Bitcoin is making a very similar move to Ethereum as we speak. It is in the midst of an edge-to-edge move on the Cloud with a great setup for a TK cross and 50/200EMA cross in the next few days.
When that happens, we would expect price to react accordingly and follow the same upwards trajectory as ETH has done.
The traditional edge-to-edge trades on the Cloud dictate potential targets once price nears or breaches the upside or the downside of the cloud. So in bullish environments this would be at or near the top of the cloud with stoplosses set below the bottom edge.
None of this should be construed as financial advice. BST owns both BTC and ETH.