Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Cardano (ADA)

Bitcoin (BTCUSD)

Above: Bitcoin (BTCUSD)

This chart pattern is, by far, one of the best short pattern setups I’ve seen on Bitcoin’s chart in a while. What we have on this chart is a pattern in Point and Figure known as a Bull Trap. Notice the last X in the column – it’s a break of a triple top. Triple bottoms and tops are the most sought-after standard Point and Figure patterns because of their exceedingly high positive expectancy rate for profitability. But that is where Bitcoin appears to have paused. If there is a new column of O’s that prints and makes a double bottom at $44,500, we need to look for an entry at $44,000 to initiate the completion and confirmation of a bull trap. The profit target would be $38,000, with a stop loss at $45,500.

Sell Stop @ $38,000

Profit Target @ $38,000

Stop Loss @ $45,000

Ethereum (ETHUSD)

Above: Ethereum (ETHUSD)

Ethereum has a great short entry if it develops. A short entry with a sell stop at 1,740 breaks two key support levels: the dominant uptrend angle and a double-bottom. Profit Target is at 1,665. I’d look at a stop loss slightly above the last X at 1,760.

Sell Stop @ 1,740

Profit Target @ 1,665

Stop Loss @ 1,780

Litecoin (LTCUSD)

Above: Litecoin (LTCUSD)

Litecoin’s short setup has a combination of features that exist on Bitcoin’s and Ethereum’s chart. If Litecoin drops down to the sell stop at 177, that would confirm two major bearish events. First, it would break the uptrend angle converting the Point & Figure chart to a bear market. The entry also confirms a bear trap. I have a profit target set down at 162.

Sell Stop @ 177

Profit Target @ 162

Stop Loss @ 183

Cardano (ADAUSD)

Above: Cardano (ADAUSD)

Cardano has been very good to me in 2021 – but I’m going to keep preaching a near time top is likely in, and we should anticipate a move south across the board. Cardano has a pattern known as a spike pattern, a single column with 14 or more boxes (X’s or O’s). There are precisely fourteen Xs in the current column. The trade setup is easy – but does require some active management or at least some frequent attention given to the chart. The entry in a spike pattern is the three-box reversal. On Cardano’s chart, that means we would place a sell stop at 0.900 with a profit target set at 0.86. Now, it’s essential to pay attention to spike patterns because the current high of 0.94 could very quickly change and move higher, which would also increase the sell stop entry.

Sell Stop @ 0.90 (adjust as it rises)

Profit Target @ 0.86 (adjust as it rises)

Stop Loss 0.95 (adjust as it rises)