A quick trading note for you today: something I hope you’ll find useful as you look to trade crypto over the next while.
In the last few months we’ve seen a decent rally in Bitcoin, Ethereum and a few alt coins. As you know, my own Portfolio remains approx. 40% ETH, 40% BTC & 20% alt coins.
And I’ll continue to look to buy any dips in the coins I have been discussing in my updates. I have a number of my radar, including OGN, ALGO, XTZ, HBAR, POLY, UMA & NULS.
But before we invest anything, I wanted to make a few things clear about the price action in crypto right now.
These are a few important factors that we need to consider before we invest anything…
1. Crypto and in particular Bitcoin/Ethereum is still tied to the wider Stock market given the current historic volatility and skittish money managers. Covid Cases globally are rising (new California shut down this morning) and this could easily delay the general economy improving and hence crypto’s time to shine.
2. Bitcoin still hasn’t broken out yet so until it does, entering the alt coin market now, especially after large gains is risky. Take a look at my update yesterday so what needs to happen before we can say that Bitcoin is breaking out.
3. A lot of alt coins look a bit overbought (RSI over 70 in a lot of cases) so I am not buying any right now. I am sitting on coins I bought last week, last month or longer as outlined in my posts.
4. You can reduce entry risk by waiting for dips, any retrace of e.g. 50%-62% of a meaningful move is a good entry. Don’t buy coins right after huge gains unless there’s a very good technical analysis reason to do so. Be patient, set buy orders and wait for the price to come to you. You need to actually get skin in the game so don’t cancel buy orders when the market comes to you.
As always, if you have any questions about a particular coin or anything at all, just post in the group and I’ll get back to you.