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Analysis: Monday Morning Massacre for Ethereum

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Analysis: Monday Morning Massacre for Ethereum

Introduction

This article was posted on Monday, 06:29, UTC.

Bitcoin

Bitcoin finally succumbed to the selling pressure we have been forecasting for the past few days.  All things considered, the selling has been muted and reasonable, far more so than I expected.   This sentiment may be premature of course.  There could be another shoe waiting to drop.  But I note that a 5th arc on a 15 minute chart has (so far) stopped the decline, so I lost my bearishness  at the arc. I sent a tweet at the time.

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Ethereum

Editor’s update: Ethereum’s flash crash only happened at “Kraken” due to a DDoS-attack.

Ethereum was a massacre.  The selling took out every leveraged trader I am sure.  Prices took a nosedive to $30 in a manner I briefly described in yesterday’s column. Short-selling, stop-running, margin calls and panic crushed a lot of people. I hope my leveraged readers were smart enough to take my advice and lighten their leveraged positions yesterday.  If not, they saw their dreams dashed a few minutes ago.

I believe the low is in at $30, but there could be another show left to drop.  It seems unlikely though, because the margin calls have already closed everyone out and the stops are cleared also.

Litecoin

Litecoin hit our target of $30 and has sold off a bit since then.  Given the selling going on today, it may still correct pretty hard as well.  Beware…

ETCUSD

We suggested that ETC might correct to the $5.50 area. At this writing we have a low of $5.17.  It seems like a low might be in, but it is hard to say.  The bears are in full control this morning in a coordinated attack across the spectrum.   It’s hard to say where any of it will end.

Overall, it’s a good morning to be either  in cash, or short.  There will be some great buying opportunities soon, but be careful!

 

 

Remember:  The author is a trader who is subject to all manner of error in judgment.  Do your own research, and be prepared to take full responsibility for your own trades.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Jim Fredrickson

Jim Fredrickson

Jim has an MBA from the University of Southern California. He has had a long career in both Corporate Finance and IT. Along the way he discovered that trading was a vehicle with great promise, but struggled for a long time without a mentor. After having been knocked down many times and having struggled to get back up, he had an epiphany and realized that geometry was a solution. He shares his experience here. If you do well as a result of suggestions made here, feel free to say thank you :) BTC: 1FUq3GB1Q8zz2JpuBr7YHzVBKnaWoxgmya Follow him on Twitter (@jimfred1276) or email him at jimfred1276 at gmail.

Comments
  • user

    AUTHOR eko6321

    Posted on 6:38 am May 8, 2017.

    Hello Jim

    What happen to ethereum last night it was scary I be honest. Do you think can we hold ethereum or we sell.
    Or where we setup trailing stop limit.

    Please advice

    • user

      AUTHOR Jim Fredrickson

      Posted on 7:27 am May 8, 2017.

      I don’t like anwering such questions because I don’t know your situation. It WAS scary, but imho the selling is over for now. Me? I would hold here…

  • user

    AUTHOR [email protected]

    Posted on 6:59 am May 8, 2017.

    Hi Jim, I can see ETH is around $90 on GDaX and Coinbase and BTC near $ 1650. Which exchange you are referring for the prices?
    Also, I am heavily invested in LTC. Should I exit since it’s near$28.9 now?

    • user

      AUTHOR Jim Fredrickson

      Posted on 7:40 am May 8, 2017.

      I use kraken. My prices are the ones that exchange registers. LTC is still a good asset, imho…

  • user

    AUTHOR jedadoo

    Posted on 7:14 am May 8, 2017.

    I’m a bit confused. Eth holding at $90+. I see some comments on polo about kraken being hacked. I pulled my Eth to a local wallet to prevent myself from selling it quickly 🙂

  • user

    AUTHOR iamniks

    Posted on 7:14 am May 8, 2017.

    Any thoughts on XRP?

    • user

      AUTHOR jedadoo

      Posted on 7:15 am May 8, 2017.

      He gave some a few days ago, saying ti may triple this summer. Looks like it may sooner than that… I’d be interested in STR. Had a HUGE day at polo. Didn’t get in, but thoughts would be good.

      • user

        AUTHOR iamniks

        Posted on 7:16 am May 8, 2017.

        As I remember the goal was 0.2 which was today in the night:)

  • user

    AUTHOR Gabriel

    Posted on 7:28 am May 8, 2017.

    Each exchange has different prices, because different people agree on different prices, depending where they trade. This leads to certain arbitrage opportunities. The prices seem to be mostly from Kraken aren’t they?
    My personal opinion is that it is best to invest broadly, and buy each coin after much research, to see if you would still be happy holding it one year from now (you may like the tech, etc.). That way you will benefit from the global rise of the crypto markets. Trying to always chase the fastest horse and switching all the time is too stressful, and also makes it hard to track your results.

  • user

    AUTHOR foryou

    Posted on 8:39 am May 8, 2017.

    Hy, Jim,

    Seeing the ETH scary situation yesterday, I sold my holdings because it was well over my cost! I mostly do short term trading so that way it works for me.

    1. ” why do not you cover other potential AltCoins like Strat, Pink, SYS, Factom, …etc ? ” May be you do not want to confuse your followers but it would be much appreciated if I get to read on them as well. I see that there lots of money in these coins. I saw someone asking this in a comment under a recent post you made but you did not reply that!

    2. Any buy signal for now would be helpful.

    Will appreciate your reply on this.

    I have recently subscribed to your recommendations, it has been a good experience so far.

    Thanks 🙂

    • user

      AUTHOR Jim Fredrickson

      Posted on 11:56 pm May 8, 2017.

      Hi, I am stretched thin trying to cover the few coins I actively cover already. Also, I trade on Kraken so charts on kraken are the ones I most easily see. Which exchange lists those coins? I will look into it.

      • user

        AUTHOR foryou

        Posted on 12:25 pm May 9, 2017.

        Poloniex. Do have a look, covering around 10 coins would be good. I have been closely watching them and made good money too. Your expert advice would always be helpful for everyone here. Thanks

  • user

    AUTHOR amirheavy666

    Posted on 9:05 am May 8, 2017.

    AND Abour XRP what happen now 0.18 goto 0.25????

    • user

      AUTHOR Jim Fredrickson

      Posted on 4:27 pm May 8, 2017.

      .25 was our target, but i didn’t expect to get there for another month. amazing.

  • user

    AUTHOR excesstomcat1

    Posted on 9:05 am May 8, 2017.

    Can you please go into more detail about when to potentially sell Ethereum? Also what did you mean by ETH dropped to $30? I did not see that on coinbase.

    • user

      AUTHOR Jim Fredrickson

      Posted on 11:01 am May 8, 2017.

      Apparently, this massacre was limited to Kraken. This is the exchange I trade on and monitor, so I did not realize this aberration occurred on a smaller scale. I am surprised that arbitrage did not arrest this massacre, if it was not happening elsewhere at the same time – but there it is.

      • user

        AUTHOR ryepdx

        Posted on 8:27 pm May 8, 2017.

        Poloniex was also down during the Kraken DDOS, which probably hindered arbitrage. This was pretty clear market manipulation.

  • user

    AUTHOR thoth

    Posted on 9:41 am May 8, 2017.

    “We suggested that ETH might correct to the $5.50 area. At this writing we have a low of $5.17. It seems like a low might be in, but it is hard to say.”

    You mean ETC?

  • user

    AUTHOR thoth

    Posted on 10:16 am May 8, 2017.

    And those ETH sells on Kraken looks like fat fingers, nowhere else went near that low in USD

    • user

      AUTHOR Jim Fredrickson

      Posted on 11:04 am May 8, 2017.

      Could have been, but it does not matter if it was fat fingers or thin. The result is the same.

  • user

    AUTHOR titaniumdave

    Posted on 11:49 am May 8, 2017.

    KRAKEN froze yeserday. Volume dried up during the freeze, dropping price and triggering calls. The drop in price of ETH had nothing to do with actual market sentiment and everything to do with their glitch, which is why it was localized to Kraken and didn’t occur on any other exchanges. ETH sentiment is still strong.

    • user

      AUTHOR Jim Fredrickson

      Posted on 3:35 pm May 8, 2017.

      That’s quite relevant information from a technology point of view. But from a traders point of view, it is irrelevant what caused such a price fluctuation. I write this column from a trader’s point of view, to help traders.

      • user

        AUTHOR Joshnj82

        Posted on 9:24 am May 9, 2017.

        The massacre began around 6:00p EST with a large sell order dropping ETH price on Kraken. Sh-t really hit the fan as the market went down from a DDoS attack and traders were unable to manage their positions causing plenty of liquidations and triggered SL’s. The selloff was seen across all markets but the bottom was significantly lower on Kraken.

        • user

          AUTHOR Jim Fredrickson

          Posted on 10:28 pm May 9, 2017.

          That is interesting, from an intellectual point of view. But I don’t buy DDoS as a “reason”, since the damage was limited pretty much to ETH (that day). It was chart-specific. Anyways, speaking for myself, as a trader, I don’t care all that much about “why” a chart makes a significant move. I mean, does it really matter? Not to me. There are million pieces of news events every day. Some bullish, some bearish. The charts give warnings of danger in advance, most of the time. I will likely address this issue in my next column. Thank you…

          • user

            AUTHOR Joshnj82

            Posted on 11:59 pm May 9, 2017.

            I mentioned the DDos attack in regards to losses and liquidations on Kraken only. I agree with your overall statement and wasn’t trying to speculate with a broad brush. I believe ETH bottomed at $26 on Kraken vs ~mid 70s elsewhere. To your point, the “why’s” are besides the point

  • user

    AUTHOR octave

    Posted on 3:29 pm May 8, 2017.

    Are you on drugs? Many mistakes in this article

  • user

    AUTHOR And

    Posted on 8:54 pm May 8, 2017.

    Jim, do not pay any attention to inappropriate comments. Your articles are simply fantastic! Thank you Jim!

  • user

    AUTHOR [email protected]

    Posted on 9:02 pm May 8, 2017.

    I always follow and appreciate your suggestions. But always check few basics before actions. Mistakes happens but you are quick to rectify and update on twitter.

    Keep up the good work Jim. Thanks again.

  • user

    AUTHOR jedadoo

    Posted on 10:03 pm May 8, 2017.

    Should rename this to “Monday Afternoon Ripple Massacre” — nearly 40% drop in mere minutes.

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