Bitcoin, Ethereum, & Litecoin Setting Up Really Well
Despite declining over the past few weeks, cryptocurrencies Bitcoin, Ethereum, and Litecoin looked poised for another move higher. Bitcoin, for instance, dropped more than 25% from over $57,000 to under $45,000 in just eight days. These types of moves can be scary to sit through. However, when put in context of a much broader move, like Bitcoin has been experiencing, these pullbacks can often be deemed healthy and normal. What really impresses me about Bitcoin is that it continues to hold above its' 50-day moving average. Buying near this key level support has helped me to add to my position while at the same time offering me a quick exit should the trade run against me. I recently added again to my position as Bitcoin approached and found support at the 50-day moving average. I will quickly take a loss if this key moving average is breached.
Ethereum and Litecoin have also been experiencing very constructive action. While both pulled back hard last week, when we take a long-term view on a weekly chart, both seem to be forming huge cup and handle patterns which offer the potential for large gains. I have positions in both with a stop loss in place to limit my risk. For crypto trading, I like to adjust my position sizing and use a wider stop loss to account for the inherent volatility in cryptocurrency trading.
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Full Disclosure: I currently own Bitcoin, Litecoin and Ethereum.
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