Technical Breakdown - 27th August
Today is the 27th August 2020, let’s get another technical breakdown published and talk about some of the recent moves we have seen on both the LTF and HTF charts. I hope this newsletter/article helps to explain in more detail my current bias for PA and where I think we could be heading over the coming days, weeks, and months! Enjoy.
So firstly I just want to talk about this most recent pullback we have seen on the major caps at the moment, the momentum of course led by Bitcoin at the moment. As you can see from the chart below, our previous trendline which was supported by buyers is not a point of resistance, flipping this key level back into resistance after it was support for such a long and extended period of time is not want we want to see from a bullish standpoint.
After a gradual climb back to test that trendline and confirm it as resistance, we have now seen PA fall all the way back down to around $11,200 which as I have mentioned previously is the last major support level before we see mid to low $10,000's range. We have wicked down previously to around $11,200 over the past month and found buyers so technically this is a no-trade zone until we find in which direction we will be heading next. I would not want to go rushing into a short position just due to price currently being at support.
To be fully transparent it is very likely that the support around $10,500 will get tested at some point in the near future and I don't really see a scenario where we go back to all-time highs without that key level at least being retested. If you have been in a high leverage position since around $9000's then now could be a good place to lock-in some profits and make sure that your portfolio is positioned for both upside and downside from here.
In terms of ETH/USD currently, it seems as though buyers are stepping in once price break below $378 at this key support level that has been defended for the past month. Honestly, price action is highly correlated with bitcoin at the moment so it really depends on if the market is going to stabilise here and find a bottom, because if bitcoin tanks then I'm expecting ETH to revisit $350 region. At least this currently daily close is looking to stay above this level and so there is no real reason to start panicking for the time being.
Higher timeframe for ETH is still generally looking bullish and even a pullback between 10-20% would still be considered healthy in this type of 'bull' structure. My main focus right now is to just slowly take profits the longer we are at these levels and then use that capital to rebuy down the line when we do see a pullback. I understand that it can sometimes be emotionally difficult to take profits when you are so bullish but it is a necessary evil that has to be done, especially if you're looking to keep your profits and not give them back to the market. Play this next 1-2 weeks safe and take some precautions, that would be my advice.
I would personally say that I am neutral on the market right now, there are a few good altcoin opportunities that I will dive into in the next article but in terms of both BTC and ETH I would be flat and not rushing into a position on either side, especially with leverage.