Volatility is picking up again, it is happening exactly during the volatility window that we forecasted. Crypto is not escaping volatility. However, for now, the really big drop is not happening. This is not to say that crypto can’t accelerate the downtrend. What we are saying is that there is plenty of support to avoid another big crash in crypto, similar to the one in May/June of last year.
The one crypto chart that illustrates our point of view is the Ethereum chart, embedded below.
We discussed the same ETH chart two weeks ago Ethereum: A Buy Opportunity Is Underway:
- The 1549-1658 area has lots of resistance.
- It’s the 3d attempt of Ethereum to clear this area since last summer.
- We suspect that the 4th attempt will come with a breakout, but only in 4 to 6 weeks from now.
- Everything will depend on how low ETH will fall. If support at 1336 will hold, in March, we are convinced that ETH will clear 1658 not later than April of this year.
Interestingly, since then, really nothing has hanged in the readings.
The most important level to watch, as volatility is picking up, is bullet point #4 (see above): “Everything will depend on how low ETH will fall. If support at 1336 will hold, in March, we are convinced that ETH will clear 1658 not later than April of this year.”
We can be more precise by pointing out that it is the 1235 – 1336 area that should provide support in order to confirm a ‘buy the dip’ opportunity. We always think in terms of 3 to 5 day closing prices.
No crash in case 1235 – 1336 is going to hold. For now, it looks like this area is going to provide strong support. But, as always, the market will have the last word.
We will have an answer from the market in the next 10 calendar days.
In our crypto research service, we will be tracking relative strength in our watchlist of 30 tokens. We also do expect to hit at least one unicorn (a multi-bagger) before the start of the summer.