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tl:dr = ROTATION
The pattern APPEARS (just an assessment of the probabilities-not guaranteed) to be bots and whales rotating money around to various coins in order to get traders chasing, spike prices, then moving to the coins that have been “forgotten”.
In other words, whales and bots sucked smaller traders into low cost high flyers and away from the biggest coins, then rotated back to the higher priced coins (XMR, ETH, ETC, ZEC) and left the low cost coin holders waiting, hoping for the next big move.
For some suggestions on how to react to this pattern, see end of this post.
NOTE: There’s no guarantee this pattern is correct and low cost coins can spike at any time–but it’s based on an assessment of the patterns in the charts as follows:
Here’s a more detailed analysis of how we came to this conclusion.
Start with this DGB chart during an extremely volatile market a few days ago
While pattern behaved like Wave three after the steep drop, it did not take off as expected. A similar pattern occurred for STR May 21 – when STR had a sizeable breakout from it’s channel that failed and fell back into the channel the next day.
Similar red flags showed up on SC’s chart big move up that stalled and fell back. XRP’s has fallen back enough from it’s recent highs on Wave 3 that it’s pretty safe to assume it’s in Wave 4 which can (and ususally does) last for awhile.
So what’s the pattern here?
- Low cost high flying coins
- Made huge moves that brought in huge volume. Likely a lot of newbie and small investors.
- Moves did not follow through on high prob patterns (in XRP’s case there are other factors but again probabilities are not likely to shoot up so quickly and with such high investor expectations.
Meanwhile many high cost coins started shooting up in price (of course BTC, but also ETH, ETC, DASH, XMR, ZEC) as these low price coins stalled, plus a few other low cost coins started spiking (FCT, GNT).
Bottom line? The pattern APPEARS (just an assessment of the probabilities-not guaranteed) to be bots and whales rotating money around to various coins in order to get traders chasing, spike prices, then moving to the coins that have been “forgotten”.
What can traders do?
- Pursue hi probability trades – there are clues when a move isn’t going to follow through such as reduced volume, falling back into channels, and many more.
- TRADE YOUR PLAN. Adjust thinking to IT and LT (intermediate and long term) This is hard to do when you see coins going up 50-100% in a day, but if you’re trying to make money for years, positioning smaller amounts for IT/LT targets can be very profitable
- Don’t chase high flyers – Get a safe entry and have a clear exit plan on any trade you may decide to make. Putting a large portion of your investment funds into a “high flyer” makes little sense — surely you’ll be wrong one time, and that can destroy your trading account.
- Subscribe to cryptopatterns! Get our analysis of the probabilities that can help you stay informed on coins you might trade and the crypto market in general.