Spotted some bulls in crypto currencies

Fundamental Scepticism

I consider myself a crypto currencies sceptic. I am fascinated by the technology behind it (distributed ledger, blockchain), but I have never traded any and still am not trading them…yet. I despise the costly transactions and do not see how the existing crypto currencies can revolutionize the financial world without widespread application and acceptance in everyday life. And yet, I believe I have spotted some bulls in crypto currencies.

I believe that at some point governments around the world will pick up the tech and simply implement their own version of bitcoin. Backed by the force of the gun this new coin will make the “free” versions obsolete or condemn them to a niche existence.

Hedera Hashgraph

By the way, coming from an IT background I looked into the stuff a few months ago. I tried to understand how it works. The one place the made sense to me so far is hashgraph which has nice explanatory videos. So make sure to check that out!

$IOTUSD, $BTCUSD, $LTCUSD

But back to trading. I noticed that some of the coins trade at interesting levels. See the Iota ($IOTUSD) chart for example:

This is the kind of charting situation where turnarounds like to occur. Faking out the bears, buyers eat the supply from trapped breakdown sellers to build meaningful long positions. (You can see the same pattern in my recent post about the $EURUSD)

Same same in bitcoin ($BTCUSD):

Need more? Here’s Litecoin ($LTCUSD):

OK, I think you get the point. I am sure there are others with the same pattern. If correct, the upside is huge from a charting perspective. The downside…well that’s basically up to you to decide when to pull the plug. But safe to say, a meaningful drop below the most recent lows invalidates this trade.

Anyway, compelling stuff, thought I would let you know about it. Tell me in the comments what you think! And stay safe out there!

* Never forget, this is not investment advice. I am not recommending the purchase or sale of anything I write about. I am not allowed and don’t want to be an investment adviser. I might or might not trade the instrument I write about for my own portfolio. Do your own due diligence, take responsibility for your own trades, don’t blame others when it doesn’t work out, especially not me!

 

Silver Bull Market Ahead? XAGUSD Setup With Fantastic RRR

Silver went nowhere since a few months, probably frustrating a lot of traders in the process. Pulling them in, shaking them out. Rinse and repeat! And yet my analysis suggests a new silver bull market is in the making.

Congestion

The scenario is very simple, as trading should be. From the healthy base the metal formed in 2014/2015, in 2016 it moved strongly and impulsively upwards to a new high at around 21.00 USD. The subsequent long and grinding correction already lasts more than 2 years. And price action has been crammed into a tighter and tighter range. See the congestion on the chart for yourself:

Accumulation and a great RRR

I assume that big players currently accumulate large positions, hence prices don’t fall and congest to increasingly smaller ranges as they withstand the downside. In my scenario I anticipate silver to bullishly extend the drawn channel in the next couple of months (see chart below). There is a clear invalidation point of my trade idea. As soon as price action breaks the downside channel boundary I was wrong and want to be out of the trade and reassess.

Conclusion

This trade idea has a few things going for itself. From a risk to reward perspective this is as good as it gets. We have a very long-term scenario which allows us to turn to shorter timeframes to accumulate a sizeable position at favorable prices. The market sentiment is extremely negative towards metals after a massive and prolonged drop from 50 dollar highs in 2011. All these factors combined make this a very tasty trade which I will be looking to exploit.

 

* Never forget, this is not investment advice. I am not recommending the purchase or sale of anything I write about. I am not allowed and don’t want to be an investment advisor. Do your own due diligence, take responsibility for your own trades, don’t blame others when it doesn’t work out.