POLONIEX:ETHBTC Hi all, I believe now is a good time to shift your attention towards Ethereum and perhaps even place a trade. You may have noticed that in all my ideas for longer time frames there is always 2 components that drive what position to take. The first is technical based and the second is fundamentally based. Starting off, we can see that the price chart has formed a semi-complete double bottom at the 0.75 fibonacci retracement of the all time high. To complete the double-bottom, price needs to reach the 0.5 fibonacci retracement level at 0.09420921. From a technical standpoint, price is likely to reach this level again shown through the cup and handle inside the double bottom pattern. From the cup and handle, the price target is 0.10168460 which is obtained by extending from the 'handle' the height of the 'cup'. For a longer term target based on the double bottom reversal, I see a price of 0.15412165, returning to its all time highs. I also believe that this target may be reached by the end of September to the end of October based on fundamentals discussed below. On the MACD, we are currently in an uptrend, but what is more interesting is the histogram. From the corrective wave of the all time highs, downwards momentum has decreased. Presently, there is equal bearish and bullish momentum seen in the tight range (2 horizontal aqua lines). This signals that the bearish momentum on this market is starting to deteriorate. The current period is that of decision, whether to continue downwards or reverse upwards. Based on the technical and later explained fundamentals, there is a higher chance that momentum will shift bullish.
Fundamentally, Ethereum is headed for a hard-fork, Metropolis, of which the first phase, Byzantium, begins by the end of September (themerkle.com/ethereums-metropolis-update-will-occur-through-two-separate-hard-forks/). This update is a step towards improving the current Ethereum framework. Key highlights include: . Possibility for recipients to pay gas prices . Improved privacy (masking) (zero-knowledge proofs) (cointelegraph.com/news/ethereum-announces-metropolis-hard-fork-coming-late-september) .Increase in mining difficulty .Thereby beginning the shift to POS The last points are likely to impact highly as the view on holding Ethereum changes, where there would now be some incentive to hold Ether. For a more certain entry with less risk, wait for price to break the 'handle' top and close above on high volume (As a guideline 'high volume' would be volume greater than double the moving average volume). If price fails to break-out and price rebounds from resistance, look for an entry at the last minor support which would be at 0.07499423. This may be a good idea as the uptrend for the cup and handle that precedes it is very short, thereby making it the weakest pattern in this analysis. Entry: 0.083 or 0.07499423 TP1: 0.09420921 (Short-term) TP2: 0.10168460 (Short/medium - term) TP3: 0.15412165 (Longer term) If there is anything you'd like to add or there is something you disagree with, please comment. I always welcome feedback!
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Price broke straight through, 0.075 at over 4 times the average volume on the 1 hourly. High chance price will move to 0.066 which is a major support that has been tested twice previously. 0.066 is a good entry point if it meets the conditions I talked with Paalsern about. If price closes above 0.075 on the daily, this is a strong sign that buying pressure is still present and will make for a comfortable entry. However for now, the descent to 0.066 is looking the most likely. Thanks!
@atricoz, It will be interesting to see how the market reacts to Metropolis over the next two months! Thanks for reading!
Paalsern
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@TheTraderJ, as of now is 0.07499423 still the best entry point?
TheTraderJ
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@Paalsern, Finding the best entry requires timing the market perfectly, which is something quite hard to do and is more in the realm of short-term trading then investing. Nonetheless, I will try to explain more in depth whether or not to enter at 0.07499423 or not. Please refer to: Finding the best entry time I primarily use candle patterns rather than chart patterns. For entries, the patterns i use are spinning tops/ hammers(end of a downtrend)/Shooting stars(end of an uptrend). First, look at the spinning top pointed by the blue arrow. Price movement after completely reversed and if you had gone long, you would have timed the market perfectly. There are three things i look for and is present at the blue arrow. The first is the candlestick pattern (in this case is the spinning top), the second is if price is at a resistance/support (support in this case) and one confirmation candle that reverses trend after the candlestick pattern (which it did 2 bars after). Note that this 'confirmation' candle came at the end of TWO DAYS. So you would have to be watching price for 2 days before you could enter a position not based on impulse. Of course this method doesn't work with everything. At the yellow arrow, all 3 conditions are met but if you had entered long after the confirmation candle, you would be at an immediate loss. It stands that it should be obvious price would retrace after a large price move, so it is not recommended to have a very large confirmation candle. Furthermore, the type of market needs to be considered. At the green arrow, the market is clearly in a down trend and so even though the first two conditions are met, there is still a higher chance price will break through and continue downwards. A ranging market would be the best market for this strategy. So how does this relate presently. Currently price sits at a minor resistance and is struggling to break through. However, there is no candlestick pattern that suggests a reversal is imminent. Look at the previous minor resistance (support now) at the previous yellow line. There was no reversal pattern and price broke through. The momentum of the MACD is also increasing suggesting a more bullish sentiment. There is a higher chance price will continue its current trend rather than reverse. However the biggest case against this is the lack of volume supporting a break-out. Currently, as a trader looking for short-term gains, I would wait for a break above the current resistance on high volume or wait for a reversal indication. This means waiting and observing price at least a day to three days before entering a position. So to answer your question, if price reverses now and reaches the support at 0.07499423 and subsequently fulfils the 3 conditions (over one day or three days), then it would be if not the best, a good entry point. From an investor perspective, my outlook for Ethereum is very positive and I believe it's price will appreciate over time so any price now I believe is a bargain compared to in the future. Even if ETH/BTC does not appreciate (a possibility as bitcoin itself is resilient in it's own right), I believe ETH/USD will.
I hope the long answer does not sound like I'm droning on, but I think its important to know when to enter not based off emotions or impulse and to have peace of mind to know what you are doing, then to listen to the words of a stranger.
Thanks for reading and I hope this helps!