Why did alts TANK today?

The news won't tell you.

When there’s a sell off, it’s natural to ask: What happened?

You look on Twitter, go on the news.

And there’s always some explanation. Iran attacks Israel. COVID hits. Interest rates are rising. Stronger dollar. Weaker yen. Every day, there’s some piece of news you can attach a price movement to.

The challenge with news, though, is that you only find out about news after the drop already happened. It helps rationalize what happened, but usually doesn’t tell you what will happen next.

So what happened today?

When it comes to technical trading, what we can say for sure is that price got too high too fast. Momentum faded. Fewer people were willing to buy crypto at these prices, and more willing to sell and take profits.

In some ways that doesn’t sound that helpful because it doesn’t give you a specific driver behind the drop.

On the other hand, if you can read the charts and see that buying momentum is fading, then you can make moves long before the drop actually happens.

That’s why learning about technical analysis is helpful—because sometimes the chart foretells what will happen next.

The $DOGE example

In our Wednesday newsletter, How to Trade $DOGE, we talked about how:

  1. $DOGE’s RSI was putting in bearish divergence, which is an indicator that momentum’s slowing.

  2. Then it was potentially making a lower high after both bearish divergence and a reversal candle, increasing the probability of a retrace.

  3. And then we pointed out that bearish divergence pointed toward price coming back to at least the $0.15 level, if not the 200-day moving average at $0.12. $DOGE was trading at $0.19 at the time.

Potential lower high on $DOGE with retrace back to $0.13-$0.15 level to clear divergence.

Since then, $DOGE retraced to the $0.13 level for a 33% drop, which was actually a lot less than many other alts.

Jesse tweeted out this chart today showing the move:

$DOGE retrace

Of course, it doesn’t always work out like this. Sometimes price and RSI keep diverging. But that’s why we try to stack the reasons for a move to increase the probability that it moves in our favor.

So, what now?

If your portfolio is down bad today, it sucks. There’s no two ways around it. But hopefully, this can be an opportunity to learn from it so you can be smarter next time.

If you want help, it might be worth taking Jesse’s recorded coaching classes and joining the Market Sniper community.

For $79/month, you’ll get access to 60+ hours of recorded coaching, Discord access, the Market Sniper indicators, and access to Jesse to ask him questions. It might be a small price compared to how much your portfolio moves on a day like today.

Enjoy the rest of your weekend!

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Disclaimer

The contents of this newsletter are expressed in my opinion only, none of which is financial advice. Always do your own research as this information is intended for educational & entertainment purposes only.

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