Fakeout or Breakout?

March 25, 2022

It’s been a while since my last post, and in place of taking personal responsibility I’m going to instead blame choppy price action, a busy personal life, and the impending nuclear holocaust. Full transparency, this post is a product of insomnia on a rainy night, so if you’re wondering if trading has been a priority of mine recently, you’d be correct in thinking that it hasn’t. Time away from the charts is wonderful and you should try it sometime. OK, enough babbling.

The crypto market is at that perfect sweet spot where bulls and bears are locked in stalemate for control of the narrative. FOMO is kicking in for those who didn’t buy the bottom, and those who did aren’t taking profits. At the same time I’m seeing leveraged shorts being opened left and right amongst calls for new lows. Come to think of it, it’s the first time in a while in which Twitter seems fairly undecided on “up” or “down”, which is a refreshing break from the usual echo chamber. Regardless, Twitter is not a system for direction, and if you’re entering positions because of CryptoBirb’s tweets all I can offer is 1-800-GAMBLER and www.bankruptcy-help-center.org

The only thing that matters is what the chart is telling us, so let’s dive in.

The quarterly chart closes in less than a week and is on the verge of printing a nice rejection wick.

Coupled with the previous candle, it’s a yin and yang of perfect indecision. Not much to deduce here, and we’re not even on a remotely tradeable time frame, but I kinda thought the yin and yang line was cool so I wanted an excuse to use it. Nothing completely bearish here until a close below 29,300.

The weekly is looking good. Anything can happen over the weekend, but we wicked through an origin candle and are now expanding up.

An expansion candle through 45,678 is my bullish confirmation to hunt for a spot long. That level lines up nicely with the liquidity gap on the daily chart at 45,500. Close through and I’m looking to capture a 10% move up to 50,449.

The same play offers 13.45% in upside on Ethereum and 15.18% on SOL

Overall, things could be turning bullish but I’d like to see a few final bits of confirmation before jumping into anything. If there’s one thing we’ve learned over the past few months, it’s that these glimmers of hope are often the most dangerous times to enter. The crypto market is damn good at one thing: maximum pain. It lures the unsuspecting trader in with small gains here and there, and when you’ve finally gone all-in…

Kaboom!