Time To Take Stock

Where are we in the crypto market? 

We are on the backside of a huge December for big caps. Led by Bitcoin which hit ‘super extensions’, most of our big caps had a big month. Now our small caps are playing catch up in a big way. 

For those that have been on the service since late August, I had said Big caps were the play back then, with 10% of my personal risk in ‘alts’ or small caps. 

Then in December I suggested we get ready for the small cap run. That is what we are seeing now, and most of us were positioned early. 

But as you look at Zac and my charts we are hitting final squiggles for XRP, XLM, and LTC. Bitcoin is just weak weak weak. It can put in another high around $30K but it is so reluctant. This is the beginning of a mass correction. 

Am I still long? Yes. But I took 15% of my portfolio home to my bank account over the last two weeks. This amounted to 20X my original principle put in last December when Ether bottomed in wave two. What a market. It has been a big year for me. 

As I have stated, I will not be vacating the crypto market wholly. There are a lot of coins I want to hold for the long term, but I think it is reasonable that I personally could see a drop of 30-50%, maybe even 60-70% depending on how I am positioned. So, I want that hair cut to involve much less than I have in the market currently. 

What you do personally depends on you. I really suggest taking a quantitive view of your exposure. Look at the charts and long term support. Calculate you how much you MIGHT lose if those supports are hit. Are you happy with it? If not, you are overexposed for at least your emotional constitution. I can not tell you what is right for you personally. That’s up to you. If any chart is unclear, please let me know. 

When the correction starts, I think we’ll still have some long trades. We have got a lot of ‘fighters’ out there with unsatisfied targets, but it will get slim. 

For new members, I feel bad. You guys came when exchanges are seeing the heat of blow off sentiment challenge their server loads. As I said in my webinar this week ‘Cryptos suck’, humorously referring to the bad infrastructure we trade in. But for those willing to wade through that pain and security dangers, great reward comes. Certainly it has for me. 

What I suggest if in this camp, is that you see what happens to these overblown exchanges during the correction. My belief is many people head for the hills. Perhaps to never come back to cryptos again. These ‘Johnny Come Late-lies’ are about to witness the loss equal to the 2008-09 SP500 within a few weeks. For some small caps, within hours. That’s cryptos for you. 

So, my suggestion is slow down and wait patiently. The next impulse is around the corner, in my opinion. Finally, I'll put out my top picks for 2018 this weekend. But that won't mean they are urgent trades. These are simply the best of the best for a watchlist. I'll be looking for ideal entries and exits on those coins just as I always do. It may be that we need to wait for better entries after that list is published but it will depend on each chart by itself. 

Ryan Wilday hosts the Crypto Waves service on ElliottWaveTrader.net.