Today’s trading spotlight deals with the cryptocurrency Celo, which is up ~25% today, being the biggest gainer on ByBit (where I trade). You can take a look at my last post via the following link: https://medium.com/degenarchive/trading-spotlight-cryptocurrency-curve-finance-crv-244d0955a3ca
The funding rate instantly popped to -3%, which indicates a lot more Short positions than Long positions. You know the saying, do the opposite of what everyone else is doing. A lot of people short anything when it is up more than 10% it feels like. This can provide an amazing opportunity for a short squeeze. If Celo holds up a few more hours I can see this going higher. The current highest point in the last hours is around $0.68, which I guess a lot of short sellers will use as a stop loss level. If this gets broken, we might see a good spike.
Next bigger resistance is up around $0.75ish, which is the red line in the middle in the chart below.
The blue line is where Celo bottomed for some time. Wicks down to that price point at two days and then the price turned around again. On the 1 minute chart below you can see my lines of interest in pink.
The trade I would trade is going long, having a really tight risk below $0.64ish and looking for a spike above $0.66ish to stop out shorts and go higher from there. I will trade this with smaller size, as it is a really fresh chart and the possibility to get stopped out might be higher, but the return, if it squeezes, is also higher in my opinion.
IF it squeezes and runs further, I will look to short if it found a top (!Do not short on the frontside!) and made a lower high.
Always have a stop loss in place, maybe a bit below your initial risk level, to account for fast price movements, but do not get stuck in a position just because you do not want to cut a loss. That is behavior that will blow you up.
Have a great Sunday!
Niklas
This is not financial advice, it is for educational purposes only!
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