Bearish Divergence on the RSI with ETH/BTC pair. Not short.

5 Feb 2021

Not short, do not have access to leverage, otherwise, with the right setup, this could be an extremely lucrative trade if it were to work out. Only thing I am doing is continuously harvesting ETH into BTC as we go up. Not large amounts, just a few bucks here and there. I am waiting for one big, stupid, parabolic move to sell my last intended sell on ETH into BTC, but as always I will keep a core position of at least 10% ETH in long term holdings. Last big dip, I bought a fair bit back (Elon Musk tweeted that day), and then the market took a dump afterwards. Did not get flat (should have bought back much more) on the trade like I should have to do the final run up; but markets move in cycles and nothing lasts forever. For the record, I do not dislike ETH, I think it is fine, but there are issues (super high gas fees for one) that need to be worked out and we are waiting 1 or 2 years until ETH 2 makes ETH a monster which you will not want to sell ever again.

Right now, for every 12 bullish ideas (here on tradingview) on ETH/BTC I see maybe 1 or 2 going the opposite way...not quite 100% bullish crowd, but as a contrarian, that's enough for me to start increasing the sell. Also, Gold took a major dump and we have not seen that reflected in the crypto market as of yet, but if that pattern continues (gold dumps first, then crypto), we should start seeing the beginning of a major correction soon. I do not sell crypto into fiat however, but I am setting up few stable coin yield harvesting plays (started buying Dai at the start of the week) so that I have a stream of cash to direct should we go bearish for a spell, and to just leave it running rather than continuing to put all available cash towards crypto at this time, stocks that yield growth and dividends should also be on everyone's radar unless they can cover all of their living expenses through crypto (I'm nowhere near that level). I would prefer to not sell any crypto as I intend to hold for the next full cycle, thus I will need several cash streams to cover costs so as to avoid temptation to sell anything once BTC is above 100 K and ETH is above 5-10 K > 100 K is not the long term goal...

Markets don't move in straight lines...and when they do, go the opposite way somewhere along that line.

5 Feb 2021

Catatan

One other comment, already starting to see several alts outperforming ETH at this time by orders of magnitude in some cases (a spectrum not all, just a few). Once the cycle goes to the extreme when microcap cryptos start doing stupid 100x moves en masse, we know that the cycle will be about ready to turn the other direction. I've read that formula to harvest Alt > ETH > BTC, but I'm not so sure about it. Probably harvesting ALT > BTC would make the most sense because if we go into a bearish phase which tends to happen after stupid scam microcaps start doing large pump and dumps, the market has gotten to crazy and collapse and simplification comes next, which means if you don't want to cash out BTC = safe haven even though it will also be losing value, just a slower rate than ETH and the ALTS which will loose non-trivial value during such a time.

Just a theory based on history and I am open to changing my mind, but "this time it's different..." seldom is actually different. Don't be a bag holder when the market turns...Nothing worse that entering a bearish phase bagholding what everyone sold you the day after 100-200% gains and you notice that you have a lot less BTC and to a lesser degree ETH at the worst time possible.

5 Feb 2021

Catatan

Very slight angle on this, BTC dominance slight bullish divergence, kind of an odd study but when you consider the difference in price and the RSI has failed to make a new low = Bullish divergence on the RSI for the dominance chart.



Again, this alone does not mean that BTC dominance will come screaming back and make new highs, but this is crypto trading, which from what I have heard, some of the activities of retail traders are fueled by copious amounts of meth and extreme views.

If there is anything that I'm having difficulty in wrapping my head around it is the extreme moves in crypto, which I suspect is a package deal with an immature market and some extreme elements within that market. As we see more institutions in this space, the moves will probably tone down a bit. I'm starting to see the other side of that "we'll tame bitcoin meme." Not saying I side with either on this perception of the market, but such extremism is probably only good for a few market participants with the majority getting rekt on a continuous basis. Some deserve it, some don't. Maybe I'm just getting old.

6 Feb 2021

Catatan

Not sure if this will continue, but the move higher on BTC right now seems a deliberate and calculated one, as it moves into the last heavy selling zone (musk tweet weekend), perhaps a warning to those that sold too much BTC into ETH...just thoughts, truth it I'm watching as we go:

6 Feb 2021

Catatan

could also be profit taking in ETH to BTC as we prepare for a weekend dump, which is what I am actually hoping for so I can move funds around and not get rekt on gas fees...either way. Ideal situation is dump on both, but I'll take ETH getting a little rekt vs. BTC for a bit.

6 Feb 2021

Catatan

If you look at the ETH/BTC chart, this worked out, enough said. Now that that is out of the way, probably the tactic is to wait for BTC to make an attempt at new highs, which may or may not happen, once the exchange rate is favourable, switch a bit of BTC back to ETH. I am going to wait a little longer to switch some back, as I think there is a decent chance of 0.030-0.0034 > not monster gains but something. That being said, I am comfortable with my portfolio as is even if ETH gains back a bit.

8 Feb 2021

Trade aktif

I like ETH, and I like it a lot:



I will like it even more when I can buy more for the funds that I have been converting into BTC in the last couple of months. I think we can still go lower, but I am probably going to start nibbling in the next little while. Again, small amounts.