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 and has established a lower high which is a 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 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 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 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 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.
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.