TL:DR - Unclear if this is a broad bottoming formation OR brief pause in downward momentum. My long from $525 is still open with no intention to close it unless major bearish momentum takes over.
This is the ETH:USD chart with 1 day candles. So far my long at $525 is doing fair, not great, but fair. For the last 3 days price has essentially traded sideways as buyers have been slow to re-enter. Despite the short and medium trend being bearish I still feel the charts paint the picture for a bullish reversal in the next week or two. This is especially the case if you look at the Bitcoin chart.
I am aware that this is a risky position to take. "The trend is your friend" is a well known mantra in trading I am currently positioned against the trend but my interpretation of the technicals is that there is a good chance of a bullish reversal and I have been eyeing the $525 price for some time now. Plus, again, Bitcoin's technical picture TO ME looks primed for a reversal which I suspect will lift all of crypto with it.
Let's look at the chart. 4 days ago we bounced off of the $496-$529 support zone, rejecting it fairly quickly. Price has since reached as high as $592 but faces stiff resistance in the $580-$600 range. We face numerous overhead resistances in the form of the dotted downward trend line in red, the psychological $600 resistance, and the 10 day moving average in blue. This is not a good place to open new longs but I am considering closing my longs from lower as the chance of continuing on the downtrend is high. It is very likely we retest the $496-$529 support zone before making a move higher.
Of course there is the possibility the market goes to hell again, that is always possible and something to be on the lookout for BUT we are still near all-time-highs in shorts on Ether and the contrarian in me has trouble believing the crowd is right in their bearishness.
Lastly, I have highlighted with arrows the places where price has crossed over the 10MA. I've talked about this before that the 10MA has acted as very strong support and resistance for many months. The purple arrows show that when price crosses the 10MA and closes above or below it 2 days in a row it has routinely been followed by a trend reversal. The blue arrows show where there was a fakeout so clearly it is not a perfect signal but it is a good one. Yesterday we closed above the 10MA however today we look unlikely to sustain the trend. This is a bearish signal to me and adds fuel to the thought that we will likely see a retest of the $500 support area.
***This is not investing advice. I am not an investing professional. Do not invest what you cannot afford to lose. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
This is the ETH:USD chart with 1 day candles. So far my long at $525 is doing fair, not great, but fair. For the last 3 days price has essentially traded sideways as buyers have been slow to re-enter. Despite the short and medium trend being bearish I still feel the charts paint the picture for a bullish reversal in the next week or two. This is especially the case if you look at the Bitcoin chart.
I am aware that this is a risky position to take. "The trend is your friend" is a well known mantra in trading I am currently positioned against the trend but my interpretation of the technicals is that there is a good chance of a bullish reversal and I have been eyeing the $525 price for some time now. Plus, again, Bitcoin's technical picture TO ME looks primed for a reversal which I suspect will lift all of crypto with it.
Let's look at the chart. 4 days ago we bounced off of the $496-$529 support zone, rejecting it fairly quickly. Price has since reached as high as $592 but faces stiff resistance in the $580-$600 range. We face numerous overhead resistances in the form of the dotted downward trend line in red, the psychological $600 resistance, and the 10 day moving average in blue. This is not a good place to open new longs but I am considering closing my longs from lower as the chance of continuing on the downtrend is high. It is very likely we retest the $496-$529 support zone before making a move higher.
Of course there is the possibility the market goes to hell again, that is always possible and something to be on the lookout for BUT we are still near all-time-highs in shorts on Ether and the contrarian in me has trouble believing the crowd is right in their bearishness.
Lastly, I have highlighted with arrows the places where price has crossed over the 10MA. I've talked about this before that the 10MA has acted as very strong support and resistance for many months. The purple arrows show that when price crosses the 10MA and closes above or below it 2 days in a row it has routinely been followed by a trend reversal. The blue arrows show where there was a fakeout so clearly it is not a perfect signal but it is a good one. Yesterday we closed above the 10MA however today we look unlikely to sustain the trend. This is a bearish signal to me and adds fuel to the thought that we will likely see a retest of the $500 support area.
***This is not investing advice. I am not an investing professional. Do not invest what you cannot afford to lose. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
Note
We are now in an area we can expect to see resistance and a possible return of the downtrend as we encounter the $600 psychological resistance as well as the dotted red downtrend line.On the bullish side we closed above the 10 MA yesterday and if today's momentum holds up we will close above it a second day in a row which historically has signalled a new bull market. I am still long from $525 with another position opened at $568. The $568 was high risk and has a tight stop loss.
Now is not the time to open up a new long. The time was at $500-$530 when things looked bleak and shorts were at an all time high. The shorts have now been decimated so there is less fuel for upward price movement and, again, we are going to encounter strong resistance
A break of $604 would be another strong bullish signal and I would expect we move to $650 after. A failure to break $604 would trigger me to sell my position I entered into at $568.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.