Tim Knight | Sep 19, 2021 12:52AM ET
Just over a week ago, I did a post called
There is one reason, far above everything else, that I’ve decided to step aside for the foreseeable future: my observation is that the entire crypto space is being led around by the nose by the equity markets.
I have several live chart monitors in my own office, and the /RTY and /ETH are next to one another (that is, the small cap futures and the Ethereum futures). I’ve got to tell you, I might as well just turn one monitor off, because they are practically one and the same. At times, it seems they are following each other tick by tick. Listen, if I wanted to trade small cap futures, I’d trade small cap futures. I didn’t ask for this.
I think there’s actually a good reason that assets are joined at the hip: it’s because the animal spirits, and the trillions of dollars in fiat, which have compelled prices so high have affected everything. I mean, just look at last February and March, when the equity market oh-so-briefly went into a tailspin. What did crypto do? Have a mind of its own? Not at all. It fell right alongside, and very dramatically, pummeling Bitcoin down to the $3,100 area. about 95% below where it got this year.
So it really boils down to two closely-related reasons that I am simply uncomfortable remaining invested:
Now, I felt crypto was lacking a base when I did my post a week ago, but I still dabbled around with some positions. Most were profitable—some nicely so—but, on the whole, I would have been better off doing absolutely nothing and staying out altogether. In fact, I’m going to go ahead and transfer $30k out of my account and shove it back into my boring old checking account, just because I’m not even using my capital anyway. My zeal got the best of me.
Don’t get me wrong. I’ve still got a respectable profit, and I still have every intention of getting back in with both feet. But I would feel much better doing so if it was clear to me that crypto was acting with a mind of its own and, even better yet, if crypto was dragged down kicking and screaming during a nice, hearty drop in equity prices. I’d love to pick up some bargains, were such an event to transpire.
As it is now, though, I look at the longer-term Ethereum chart, and it does not scream “bullish base” to me. Instead, it screams uncertainty. On top of this, those horizontal lines I’ve drawn are vitally-important levels of price support. The lower one in particular, if broken, would portend much lower prices, I believe.
Hope is not lost, however. Almost every chart of interest to me resembles, more or less, the Litecoin chat below. What I mean by that is it is comprised of:
Break the red line, and I think we’re off to the races. Break the green line, and things look very grim and very messy.
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