ETHUSD: Bear Continuation

ETHUSD: Bear Continuation

Ethereum / Dollar BITFINEX:ETHUSD

Ethereum             has broken trendline support and is now flagging beneath – classic bearish action. A return above the support line would stall downside momentum, otherwise the path of least resistance is down.

I’m eyeing the 340 area as first support. From these levels, that’s a risk-reward of around 2.5 …not the best, maybe a better average price can be found on a bounce, maybe not.

For now, I’m not considering a drastic bloodbath in cryptocurrencies. However, I do believe that confidence has been lost, and the entire space needs to go into hibernation for a while. Evangelists will cry that ‘the fundamentals just keep getting better’, but here comes a rule in investing: fundamentals mean nothing if they don’t directly impact supply and demand . Sorry, but all the blockchain infrastructure that is popping up doesn’t mean the price has to rise. Blockchain infrastructure is bullish , if your time frame is 10 years or more, but you simply cannot trade fundamental claims. Unless there is a direct impact on supply and demand – sorry! – the market moves according to immediate confidence of market players. And right now, the moral hazard of exchanges and the persistent             danger of hacks has shot the speculative momentum for the time being. Crypto will rally in time, for now I maintain a bearish bias on the space.

With that said, now is not the time to have large positions either way. I’m trading ETHUSD             short because the risk-reward in BTCUSD             is not sufficient to even warrant a trade. My position sizes are extremely small, and my expectations are minimized accordingly.