ETHUSD - Price at extreme support, collapse? Rebound? Sideways?
TL:DR - Long opened at $451 in a high risk trade but not as high risk as buying at $545 just 2 days ago. Stop loss at $430.
This is the ETHUSD chart with 1 Day candles. For many, the last 24 hours have been very difficult. We saw promising price action with a bullish move off of a strong support area, a bullish double cross of the 5 MA and 10 MA, and several days with a close over the 10 MA. HOWEVER, the red dotted downtrend line has acted as VERY strong resistance for the last 6 weeks. I have been talking about this strong overhead resistance for several posts now and it is why I did not open a long in the face several buy signals.
Today, the downtrend line rejected our bullish price action again and we saw an >8% loss with no real negative news. So where do we go from here?
On the bearish side, since the start of the bear market price has never experienced a NEW 8% loss in a day without having a continuation of the downtrend in the following days. As we have been on a small uptrend for the last week this, to me, means we are likely to see further downward price action. A continuation of downward price action will take us to the following potential supports: $435, $400, and $381. As I've reiterated numerous times, unfortunately Ethereum's price is highly correlated with Bitcoin and less dependent upon its own merits. If Bitcoin can't hold it's support around $6,000 then Ethereum will likely fall through its supports too. My fear is that a break of Eth's $381 support and Btc's $5900 support will result in a massive round of panic selling taking us to dark places.
On the bullish side, $450 was quickly rejected with price hovering there for less than an hour. This gives me little solace as, at the time of writing, price continues to hover around $467, not far from $450. The $447 support is very close to the black upward trendline which extends back nearly a year. This line represents a reversion to the mean from before the huge price increases in late 2017. The proximity of these two trendlines make the $450 support range a very strong support line. The concern I have with the black upward trendline is that it is very imprecise, somewhat arbitrary, and totally unproven. Finally, Ethereum could decline all the way to $381 and still form a bullish double bottom formation. Of course this would mean another 15% price decline...painful.
So I did not buy at $545 because of the downward trendline. I decided to take a risk and placed a limit buy order at $450 which filled today. This is a high risk trade but not as risky as buying at $545 just 2 days ago. I've bought here because price action has set up for a triple bottom in Btc, a descending triangle in Btc, a small double bottom in Eth, and a broad symmetrical triangle in Eth. That being said, this market looks weak, I don't know where new money will come from to move price upward, and that makes me scared of a further price decline. I will watch this market closely and likely place a stop loss around $430. Price target is $525.
***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 ETHUSD chart with 1 Day candles. For many, the last 24 hours have been very difficult. We saw promising price action with a bullish move off of a strong support area, a bullish double cross of the 5 MA and 10 MA, and several days with a close over the 10 MA. HOWEVER, the red dotted downtrend line has acted as VERY strong resistance for the last 6 weeks. I have been talking about this strong overhead resistance for several posts now and it is why I did not open a long in the face several buy signals.
Today, the downtrend line rejected our bullish price action again and we saw an >8% loss with no real negative news. So where do we go from here?
On the bearish side, since the start of the bear market price has never experienced a NEW 8% loss in a day without having a continuation of the downtrend in the following days. As we have been on a small uptrend for the last week this, to me, means we are likely to see further downward price action. A continuation of downward price action will take us to the following potential supports: $435, $400, and $381. As I've reiterated numerous times, unfortunately Ethereum's price is highly correlated with Bitcoin and less dependent upon its own merits. If Bitcoin can't hold it's support around $6,000 then Ethereum will likely fall through its supports too. My fear is that a break of Eth's $381 support and Btc's $5900 support will result in a massive round of panic selling taking us to dark places.
On the bullish side, $450 was quickly rejected with price hovering there for less than an hour. This gives me little solace as, at the time of writing, price continues to hover around $467, not far from $450. The $447 support is very close to the black upward trendline which extends back nearly a year. This line represents a reversion to the mean from before the huge price increases in late 2017. The proximity of these two trendlines make the $450 support range a very strong support line. The concern I have with the black upward trendline is that it is very imprecise, somewhat arbitrary, and totally unproven. Finally, Ethereum could decline all the way to $381 and still form a bullish double bottom formation. Of course this would mean another 15% price decline...painful.
So I did not buy at $545 because of the downward trendline. I decided to take a risk and placed a limit buy order at $450 which filled today. This is a high risk trade but not as risky as buying at $545 just 2 days ago. I've bought here because price action has set up for a triple bottom in Btc, a descending triangle in Btc, a small double bottom in Eth, and a broad symmetrical triangle in Eth. That being said, this market looks weak, I don't know where new money will come from to move price upward, and that makes me scared of a further price decline. I will watch this market closely and likely place a stop loss around $430. Price target is $525.
***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.***
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