Crypto Market Strategy – Weekly Research – 8 Dec 2020
December 12, 2020
The past week has been an exhilarating ride for the short-term profits traders in the digital asset market – especially those who caught on at the good timing. Those who are brave enough to win are also brave enough to lose as the volatility of the digital asset market remains at its highest peak; the highest is the red line in the chart above. It is more appropriate to wait for the price fluctuation to settle down a little more as it approaches the yellow line before we look for the right timing to enter the market.
Technical Trading Signals
Many have been talking about BTC in the past week. The more the price reaches its all-time high, the more people pay special attention towards the asset. As mentioned in the past, considering the level of volatility, despite the all-time high pricing, there is high potential for the price to remain at this level. Thus, there is no rush to buy in at this point – wait for the price to approach the bottom of the price zone (around $16,335) or even when volatility approaches the yellow line, then consider a moment to buy – this way, a lower risk level is involved.
ETH continues to move within the top frame to cool off the heat from the past weeks which could also be impacted by the development of Ethereum 2.0. Note that Zipmex will have an article about Ethereum later on. If we focus on the price factor alone, it is safe to follow the same strategy as BTC – to buy when the price decreases or wait for the volatility to approach its average level in the part before looking for a buy signal.
XRP was less volatile compared to the previous week. This may have hurt those who bought in earlier. Fortunately, the price continues on a bearable uptrend. We recommend traders to wait for the price to test its support level at the zone as it has a potential to drop below the zone and bounce back up. Alternatively, traders could wait for the volatility to decrease ,then look for the “Reverse Candle” – the signal to buy, indeed.
Ever since LTC rebounded from the lower frame of the zone – LTC has not come down! Volatility continues to be high (the red line). This means that there is a chance for LTC to approach a downfall again. Even if the price spikes to an all-time high, there is a high chance for the price decrease again, thus there is no rush to buy. In terms of strategy, we consider this to be just as safe as BTC, ETH and XRP.
After the approach to the bottom of the zone (our buy point), the price experienced an immediate rebound to meet the resistance line (the EMA Band). Those who buy in at this point will have to pay close attention to what happens next – will the price increase, decrease, or continue on this path? There are two possible scenarios at play here: 1) we could have been fooled and the price transgress; or 2) you find resistance, here. If the price continues on the upward trend, one can only imagine that the highest price it will reach is the upper frame of the zone – where the price meets the resistance. This could confirm the existence of Wave 5. Having said that, the asset may experience further correction in the short-term. We recommend a ‘Mean Reversion’ strategy. In short, exit at the mean after being trapped – which is around the price point.
Strategy from ZIPMEX
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