Prediction evidence

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Ryan Rossi | Horse

@TheFlowHorse

ETH’s breakout today is the perfect example of one to have less confidence in. I ended up shorting it but then closing before picking up my daughter from her first day back at school. A few things: BTC isn’t breaking out with it, and there was no real compression into the highs. No multiday drift higher on tightening ranges. Price had been moving away from resistance, then ripped straight through it in one candle. How price gets to the level matters. If it’s already made a big move just to get there, you’re buying the breakout after a lot of the move has already happened, which sets up an easy place to get trapped chasing. In this case, with a good amount of positioning up through the level, and stretched 230% beyond the average daily range. I’d much rather see price tighten up under the highs and gradually press into them, or get a failed move lower first that traps shorts and helps fuel the move back up. You often see a combination of tightening intraday ranges and RV if we drift into the level. Typically unless there’s a catalyst driving it, jumping from deeper in the range straight through resistance is usually a move that isn't one to chase.