This_Guhy
Long

ETHUSD Bullish Falling Wedge into Bullish Ascending triangle

KRAKEN:ETHUSD   Ethereum / U.S. Dollar


Everyone watching Ethereum has been watching this falling wedge perform. A look at a non-standard timeframe, the 10 Day, shows we just had a bullish MACD cross yesterday. The 10D chart also shows a volume pattern suggesting/confirming my sentiment that a bull run is approaching as we have the bowl shape on the volume profile . The massive red candle in July of 2017 was the sellers finally giving in and giving power over to the buyers. The massive candle in December 18 was likewise the buyers seizing the market by force by buying aggressively at those levels and at the crux of the bullish falling wedge . The large red candle in the midldle made it clear this wasn't a simple entrancement. Falling wedges perform pretty well when they signal the end of a bear market and we can expect to at least to get 75% to target, on average.

It is well established at this point that ETHUSD was in a falling wedge and now we are performing on the target. Our first real resistance has been at about 165-ish and I think we are going to break through there in an ascending triangle formation, visible on the daily chart .

The price action has found support a bit above the 50 MA, and we see from the fib retracement too that we hit the 50% retracement of the uptrend at about the same level($120-125).
The strong support is also backed up by hidden bullish divergence between the price action and RSI . We have been consolidating at these levels for several days so I am getting pretty confident the 50% retracement will hold. If it does not the next retracement level of .618 ($110-115) gives us a chance to break through with a double bottom , but I don’t see that as being likely. (comparing kraken to bitfinex, with kraken charted). Once gain, the divergence primer:

Classic Divergence (Trend Reversal)
Bearish: Higher highs on price action but lower highs on the indicator
Bullish: Lower lows on price action but higher lows on the indicator
Hidden (Trend Continuation)
Bearish: Lower high on the price action and higher highs on the indicator
Bullish: Higher low on the price action and a lower low on the indicator.

The daily MACD has not had time to fully turn up and establish a bottom that we could realistically chart yet on the daily timeframe . The MACD should be able to stay above that support line I drew. Few things would indicate a beginning to an eth bull market than the first MACD bullish cross above zero since 2017, as all of the bullish crosses since then were below zero.

All of this still does not mean that you can just yolo in with senseless leverage, as there is always a chance that we might still be nested in a larger inverted head and shoulders pattern, which makes sense to me because that would give us the time to chop sideways in an accumulation and absorption phases as weak hands get shaken out for the next six months or so. The chart below is at this point a fair bit of speculation of how the next six months could play out, but it is entirely feasible that if you are hoping for a breakout or for the ascending triangle to over-perform you would be in for a rude awakening. And we could also be set up for another long term bullish reversal pattern, the Adam and Eve (not shown). The main point, completely disregard the idea that we are going straight up, and disregard the idea that we won't retest a shoulder price level or even $80.

But first things first, lets see if the 50MA/50% fib retracement level hold, then secondly if the ascending triangle performs. There is always a chance that the divergence won’t play out and ascending triangle fail about 30% of the time, so there is always a chance the chart was right and the triangle was just one of those 1/3rds which is why all the disclaimers about me not being a financial adviser apply.

I mentioned in my post on shorts that I have not seen the shorting I was expecting when the price of ETHUSD broke down A WHOLE 18%. IN ONE DAY I speculated that all of the shorting pressure might be waiting in sell stops below/at the 50MA/Fib retracement level and since buyers kept us above that level the shorting never gained enough steam for a long squeeze. Shorts are already coming down and longs look like they are about to climb again as the red candles narrow in a falling wedge pattern


Finally, I think BTCUSD is also in a falling wedge , and you can read that in a linked post. I think roughly the BTCUSD falling wedge will end about the time ETHUSD ends its absorption and accumulation phase, whether that be a Adam and Eve, Inverted head and Shoulders , or something else.
Trade closed: stop reached: Stop definitely reached. I ended up straddling the continuation formation when usually I completely commit to one side or the other. If this performs like the flagpole sugges then we are retesting $100, which is a big even for ETHUSD, and a 20% drop from the break out.

If we see a similar drop out of BTCUSD it will give me a third point of contact on the falling wedge I have been watching to form. The resistance is confirmed at this point and we have two solid points of contact on the support. Really looking for that third point of contact.
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