This past week has been very interesting for ETH, to say the least. The past movements have caused me to reassess my position and the patterns I have been following in the ETHUSD charts.
One of my earlier ideas, published Oct. 3rd, covered a bearish descending triangle that had formed at two points in the past and was forming again over the past month and a half following the price decline from the $290 range to $170s that took place between Sept. 4th and 11th.
From there I was anticipating another price decline. The pattern did confirm itself and ETH price did decline but slightly later than I had anticipated. If you review that idea you would see that I made it clear to enter only once the cross happened, which I did and netted some nice trades. I've noticed that it is important to be very sure that the pattern is confirming, and even though entering in the middle of the trend sacrifices some gains, it has been more successful for me in the long-run.
Here is that published idea, and the movements of ETH afterwards:
I would argue that had we not seen the chaos in Tether (USDT) over the past couple of days, and the market fleeing USDT into the functional trading pairs BTC/ETH which drove prices up rapidly, this pattern would've continued uninhibited. This market activity has caused me to review my analysis and whether or not my past patterns have any validity based on these changes.
I am now looking at this from two perspectives, both involve the descending triangle pattern I've been exploring lately. As you can see in the chart at point "A" when the price broke the lower bound of the first descending triangle we saw a decline. This occurred again at point "B". In both of these instances we saw MACD crosses down.
Then we get to point "C", part of my original analysis. The white dotted line represents the lower bound of my most recent idea that anticipated a decline on the point "C" where it crossed downwards. When this occurred I traded actively and ended up netting 60%+. I had expected this decline to continue but waited before entering any positions again, which appears to be the right move.
Now we can see that large green candle with a wick that extended back into the territory of descending triangle "C" before the drop. From a short term perspective I believe this invalidated the continuation of a decline based upon the smaller triangle "C" charted. Now if we look at things from the long term it looks like a descending triangle pattern can still encapsulate the market activity we've recently seen.
In this published idea I have extended the original descending triangle "B" to join "C", with the starting point at the height of "B"'s triangle, $321.10, and the low being the base of "C"'s triangle, $167.32. From this long-term perspective it looks like this pattern could still be valid. I believe a drop through the lower bound of this larger extended descending triangle could spell out another price decline and more pain for ETH bulls.
Placing a fib retracement on the high of descending triangle "A", to the lowest point and the lower bound of "C", also yields interesting data on this long-term trend. You can see that the original smaller "C" played out neatly under the 24% retracement for its entire duration. Even the most recent spike approached that line as well but couldn't break it. I believe ETH needs significant momentum to break that line and if it can't a reversal is much less likely.
I've also placed another shorter-term fib retracement, from the highest point of "B" to the lowest point of "C". This also provides more interesting information on what we can potentially expect in this trend.
This illustrates the decline we saw in the original smaller "C" descending triangle, and how the price moved from the 38% to below the 24%, where I had expected to see even greater downwards momentum. As we've seen ETH actually rebounded, for 3 days it was meeting heavy resistance at the 24% line ($203 price range). The USDT scare drove ETH out of that range very quickly, but it still couldn't break the 50% retracement as you can see in the chart. From that point ETH has actually fallen again below the 38% line. I see the 24% and 38% being significant points to watch over the next few days, a fall below the 24% could confirm the downtrend and we could see a break below the larger extended descending triangle's lower bounds.
I am playing this cautiously and looking for a prime entry, which for me will be the denial of ETH moving up to cross upwards on the MACD 1D chart. I don't see ETH being able to break that line, and if it cannot we should see the price to continue dropping.
Thoughts and opinions are more than welcome.
Happy trading mates!
One of my earlier ideas, published Oct. 3rd, covered a bearish descending triangle that had formed at two points in the past and was forming again over the past month and a half following the price decline from the $290 range to $170s that took place between Sept. 4th and 11th.
From there I was anticipating another price decline. The pattern did confirm itself and ETH price did decline but slightly later than I had anticipated. If you review that idea you would see that I made it clear to enter only once the cross happened, which I did and netted some nice trades. I've noticed that it is important to be very sure that the pattern is confirming, and even though entering in the middle of the trend sacrifices some gains, it has been more successful for me in the long-run.
Here is that published idea, and the movements of ETH afterwards:
I would argue that had we not seen the chaos in Tether (USDT) over the past couple of days, and the market fleeing USDT into the functional trading pairs BTC/ETH which drove prices up rapidly, this pattern would've continued uninhibited. This market activity has caused me to review my analysis and whether or not my past patterns have any validity based on these changes.
I am now looking at this from two perspectives, both involve the descending triangle pattern I've been exploring lately. As you can see in the chart at point "A" when the price broke the lower bound of the first descending triangle we saw a decline. This occurred again at point "B". In both of these instances we saw MACD crosses down.
Then we get to point "C", part of my original analysis. The white dotted line represents the lower bound of my most recent idea that anticipated a decline on the point "C" where it crossed downwards. When this occurred I traded actively and ended up netting 60%+. I had expected this decline to continue but waited before entering any positions again, which appears to be the right move.
Now we can see that large green candle with a wick that extended back into the territory of descending triangle "C" before the drop. From a short term perspective I believe this invalidated the continuation of a decline based upon the smaller triangle "C" charted. Now if we look at things from the long term it looks like a descending triangle pattern can still encapsulate the market activity we've recently seen.
In this published idea I have extended the original descending triangle "B" to join "C", with the starting point at the height of "B"'s triangle, $321.10, and the low being the base of "C"'s triangle, $167.32. From this long-term perspective it looks like this pattern could still be valid. I believe a drop through the lower bound of this larger extended descending triangle could spell out another price decline and more pain for ETH bulls.
Placing a fib retracement on the high of descending triangle "A", to the lowest point and the lower bound of "C", also yields interesting data on this long-term trend. You can see that the original smaller "C" played out neatly under the 24% retracement for its entire duration. Even the most recent spike approached that line as well but couldn't break it. I believe ETH needs significant momentum to break that line and if it can't a reversal is much less likely.
I've also placed another shorter-term fib retracement, from the highest point of "B" to the lowest point of "C". This also provides more interesting information on what we can potentially expect in this trend.
This illustrates the decline we saw in the original smaller "C" descending triangle, and how the price moved from the 38% to below the 24%, where I had expected to see even greater downwards momentum. As we've seen ETH actually rebounded, for 3 days it was meeting heavy resistance at the 24% line ($203 price range). The USDT scare drove ETH out of that range very quickly, but it still couldn't break the 50% retracement as you can see in the chart. From that point ETH has actually fallen again below the 38% line. I see the 24% and 38% being significant points to watch over the next few days, a fall below the 24% could confirm the downtrend and we could see a break below the larger extended descending triangle's lower bounds.
I am playing this cautiously and looking for a prime entry, which for me will be the denial of ETH moving up to cross upwards on the MACD 1D chart. I don't see ETH being able to break that line, and if it cannot we should see the price to continue dropping.
Thoughts and opinions are more than welcome.
Happy trading mates!