ETHBTC Perspective And Levels: Lower High Offers Important Clue.

BITFINEX:ETHBTC   Ethereum / Bitcoin
ETHBTC Update: This market serves as a good indication as far as where these coins want to go and it doesn't look bullish . The relationship helps to clarify the direction, but not the magnitude based on results of the recent price action.

This market is important because it is how a large number of investors are committed to ETH. As you can see, the recent upswing, although small, correlated well with the ETHUSD retest of 300. The price action in this market reversed at the .07783 to .08092 resistance area and has established a lower high which is a bearish sign. Lower highs often lead to lower lows. And ETHUSD failed to break 300 which should not be a surprise based on what this chart is showing.

When the coins sold off a few weeks back, this pair tested the .06674 for the fourth time and is now poised to test it again. The value of this information is not in the range of price movement, but instead the levels. A break of the .06674 support implies weakness for the ETHUSD pair which can be helpful information, especially when trying to filter buy signals.

Remember people in this market are buying ETH with their BTC . Both markets pushed significant lows at the same time against the USD and the price action in this pair was somewhat stable because the rate of change between the two markets was similar. They were both selling off fast. The fact that this market held the support during the sell off could have been used as a sign that the selling, as extreme as it appeared, was limited. That is how I will be using this chart if the coins retest the lows again.

So if this market breaks the .06674, and pushes to a lower low, that means ETH is weak and will probably be breaking support levels also. And if this market manages to bounce off the support level again, that would imply strength in the ETHUSD market. In my opinion, this market offers more insight into the price action of the ETH market along with a valuable heads up.

I will be watching the .07125 to the .06938 minor support (.618 of recent bullish swing) to see if price can reverse. If it can, then I want to know: Is ETHUSD at a projected support level? Is it showing any reversal patterns on a smaller time frame? If yes, then if the risk makes sense, I am open to the possibility of taking a long swing trade. If the minor support in this market is compromised, then I don't care what ETHUSD is doing, I will not be considering any swing trade in that scenario. The market will decide and since there is a lower high in place, the bias is leaning toward the support breaking.

In summary, this market is good to evaluate every so often to see what clues it offers in terms of the relationship between the ETH and BTC markets. A large number of investors own ETH in terms of BTC and levels and patterns on this chart can give us an idea of how each respective market is more likely to behave. Since price is poised to break below a very significant support, I am very curious to see how each of the coins behave in terms of the USD. If anything, this chart is saying the bearish momentum is still present, and any break of resistance will most likely fail which adds to the high risk argument I have been making in my previous reports.

Comments and questions welcome.
Marc Principato, CMT |Author: Analyze Any Financial Market Like The Pros Using Price Action| | Cofounder (S.C.)

I totally share your views. Great chart ;)
sgemini sgemini
Again, what a great chart ;)
I still don't understand how the relationship between ETH vs BTC affects ETH/USD pair. ETH/USD and BTC/USD usually move together, so I assume any fluctuation in ETH/BTC chart is due to the differences in movement between those 2 compared to USD.
Ex: ETH could be gaining ground on USD - BULL (let's say it breaks 300), even so it could still be dropping (BEAR) vs BTC b/c BTC might be riding a stronger BULL vs USD.
dimisus EtherSwinger
@EtherSwinger, check the comparison ETHUSD / BTCUSD charts. Basically almost the same movement. You will find the same behaviour in all altcoins. The reason is they are basically all traded with / connected to BTC, so instead of having a primary USD value they have a primary BTC value and secondary USD. If BTC goes down they are, according to the market, "not allowed" to stay high in USD. BTC is the fundament of the crypto world and you should not consider USD as the main currency in cryptos .... it is just an equivalent. I guess it will take a while until coins release themselves from BTC and go their own trading path... at least in my opinion.
Thanks bro! But that descending triangle is getting scary....
+1 Reply
I find it impossible for $ETHBTC to break .06674 except for fatal error. My view in the current market now: we will not go lower than these levels (280s $ ). Many people are hoping again for 220$, but it will never come again. I find any price bellow 300$ is very good , even for short term trade .Thanks for sharing and FYI: I trust only you in this website Marc , I learned alot from you. keep the good work.
+1 Reply
Sixboost xmaenx
@xmaenx, do you have some TA to back up this statement or is your opinion just sentiment driven? As @Goldbug1 often says, the market does what it wants and doesn't care how you feel.
+1 Reply
xmaenx Sixboost
@Sixboost, Yes I do agree with you and that`s why I always adjust my position and follow the market. and I never limit my self to one statement. But I learned to think like others. Currently all are fearing to miss the "moon". and we all know that TA is very limited in crypto. and only news move the market. Next month is a big month for ETH and it is nearly impossible for people to panic sell like what happened after china news. I will be honest with you, I made a huge profit when we went 200$ and believe me many others had. and that chance will never happen any time soon.
+1 Reply
Sixboost xmaenx
@xmaenx, you don't think when China closes all exchanges in 3 days it will have an effect? The market has been bearish for over a week, if what you're saying was true we would already be past $4600.
+1 Reply
xmaenx Sixboost
@Sixboost, all the exchanges that will close in 3 days have no effect on the market plus you saying it must go to 4600 is absolutely not true. healthy bull needs time especially after a big correction. patience is the key. gd luck
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