$ETH On The Edge: Short Trade With Major Confluence
Trade Thesis:
Ethereum (ETHUSDT) is flashing several bearish signals that suggest a potential significant downside move. With Bitcoin (
BTC) in a short-term downtrend, ETH appears poised to follow suit. Here's why this setup could be a high-probability short opportunity.
Technical Analysis:
Strong Overhead Resistance at $2700:
Key Resistance Level: ETH rejected off the $2700 area, a significant resistance area that's previously halted upward movements.
High Volume Node (HVN): This level coincides with a High Volume Node, indicating heavy trading activity and potential selling pressure above this price.
Price Crossed Below VWAP and HMAs:
VWAP Break: ETH has dipped below the VWAP, signaling a shift toward bearish momentum.
30 & 60 Hull Moving Averages (HMAs): Trading beneath the 30 and 60 HMAs adds to the bearish outlook.
Bitcoin's Downtrend Influence:
BTC Correlation: Bitcoin's decline sets a negative tone for the crypto market, increasing the likelihood of ETH moving downward.
Market Sentiment: A bearish BTC often leads to selling pressure across major altcoins like Ethereum.
Potential Support Levels:
Minor Support at $2500: Watch for temporary support around $2500.
Major Support at $2350: A significant support zone with another HVN lies near $2350, which could be the target area for this short.
Attractive Risk-to-Reward Ratio:
Stop Loss Options: Place a stop loss at $2700 (conservative) or $2750 (aggressive), based on your risk appetite.
Take Profit Target: Aim for the $2400 area, offering a 1:1.5 or 1:2 risk-to-reward ratio, depending on stop placement.
Trade Setup:
🔹 Entry Point: Consider entering a short position below $2600 (below the strongest HVN area)
🔹 Stop Loss: Set at $2700 or $2750.
🔹 Take Profit: Target $2400 or $2350.
Key Indicators to Watch:
VWAP and HMAs: Sustained trading below these may confirm the downtrend.
Volume Trends: Increasing sell volume can strengthen the bearish case.
Bitcoin's Movement: BTC's price action will likely influence ETH.
Conclusion:
ETH is teetering on the edge, with multiple technical factors pointing toward a potential pullback. The convergence of strong overhead resistance, bearish moving average crossovers, and Bitcoin's downtrend creates a compelling short setup. Trading is about probabilities, and these aligned signals boost the confidence in this trade idea.
Enjoyed this analysis? Smash thE follow for more exclusive insights and high-probability trade setups! 🚀
Ethereum (ETHUSDT) is flashing several bearish signals that suggest a potential significant downside move. With Bitcoin (
BTC) in a short-term downtrend, ETH appears poised to follow suit. Here's why this setup could be a high-probability short opportunity.Technical Analysis:
Strong Overhead Resistance at $2700:
Key Resistance Level: ETH rejected off the $2700 area, a significant resistance area that's previously halted upward movements.
High Volume Node (HVN): This level coincides with a High Volume Node, indicating heavy trading activity and potential selling pressure above this price.
Price Crossed Below VWAP and HMAs:
VWAP Break: ETH has dipped below the VWAP, signaling a shift toward bearish momentum.
30 & 60 Hull Moving Averages (HMAs): Trading beneath the 30 and 60 HMAs adds to the bearish outlook.
Bitcoin's Downtrend Influence:
BTC Correlation: Bitcoin's decline sets a negative tone for the crypto market, increasing the likelihood of ETH moving downward.
Market Sentiment: A bearish BTC often leads to selling pressure across major altcoins like Ethereum.
Potential Support Levels:
Minor Support at $2500: Watch for temporary support around $2500.
Major Support at $2350: A significant support zone with another HVN lies near $2350, which could be the target area for this short.
Attractive Risk-to-Reward Ratio:
Stop Loss Options: Place a stop loss at $2700 (conservative) or $2750 (aggressive), based on your risk appetite.
Take Profit Target: Aim for the $2400 area, offering a 1:1.5 or 1:2 risk-to-reward ratio, depending on stop placement.
Trade Setup:
🔹 Entry Point: Consider entering a short position below $2600 (below the strongest HVN area)
🔹 Stop Loss: Set at $2700 or $2750.
🔹 Take Profit: Target $2400 or $2350.
Key Indicators to Watch:
VWAP and HMAs: Sustained trading below these may confirm the downtrend.
Volume Trends: Increasing sell volume can strengthen the bearish case.
Bitcoin's Movement: BTC's price action will likely influence ETH.
Conclusion:
ETH is teetering on the edge, with multiple technical factors pointing toward a potential pullback. The convergence of strong overhead resistance, bearish moving average crossovers, and Bitcoin's downtrend creates a compelling short setup. Trading is about probabilities, and these aligned signals boost the confidence in this trade idea.
Enjoyed this analysis? Smash thE follow for more exclusive insights and high-probability trade setups! 🚀
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.