ETHUSD: Bottoming Formation Materialzing Around 423 Level.

BITFINEX:ETHUSD   Ethereum / U.S. Dollar
ETHUSD update: Similar to the bottoming pattern in BTC , this market is now in a high probability area to retrace. What makes this market even more interesting is the fact that the current low is still no where near the 374 low. A rally here is not only a broader sign of strength, but offers greater potential compared to a counter trend retrace.

Earlier today on S.C., I published a BTC article about bottoming patterns. They are usually made up of a series of structures, but what makes them most significant is where they are developing.

The pattern is actually clearer in this market than it is in BTC . The 418 low is not that much lower than the 450 low, a pin bar is present off the 423 reversal zone boundary and now a spinning top is materializing off the same level. Together, these structures could be the beginning of an inverted head and shoulders formation which is bullish .

If this pattern continues to unfold around the current price level, it would also be establishing a very broad higher low formation. I wrote about this in a previous report that looked at the Elliott Wave count.

The potential target for a broader higher low formation is the 581 resistance (.382 of recent bearish structure). This will not happen over night, but certainly within reason over the next month.

In summary, like I have been writing on S.C., we always consider the broad probability of the location when evaluating levels and trends. We do not rely on oscillators or moving averages for these situations because they are not the most effective tools for anticipating broad reversals.

For that reason we manage inventory as well as short term swing trades when the risk makes sense. At the present, the reward/risk is favoring both position and swing trade strategies long. It is all a matter of having a process to quantify that risk and decide if it is within the scope of your tolerance.

If the current spinning top closes and the next candle takes out the high, that is a technical trigger to go long. We are long BTC so we will not be officially calling this trade idea in order to keep risk within the scope of our overall plan.
Comment: ETHUSD quick update: A break above 446 is a long trigger at this point. It is all a matter of if BTC rallies or not. These markets are attempting to establish a higher low which is a sign of strength, especially in a location where probability of a bullish retrace is high. I follow broad probabilities, structures and levels, nothing else. I will be posting a new chart on BTC momentarily.
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Indicators are also show strong level of divergence on the daily. Time will tell I suppose.
+3 Reply
I appreciate that you are watching ETH for us right now. Twice I avoided jumping in at 425... and should have done it.. LOL I am thinking the springboard should be the next dip to 425 again... providing other indicators show favorable for recovery knee-jerk impulse for buyers to rush in. What are your thoughts on this speculation?
+1 Reply
we tank every time magic longs are way high against margin shorts
everybody is leverage longing the drop, so more down to come most likely
the whole problem is BTC longs are over leveraged by 20% on shorts. so he will keep dropping till they are near 50/50. longs pay shorts and shorts pay longs. expect some more down till leveraged longs start sellinghttps://www.
jlhequities jlhequities
Thank you so much for the great analysis!
We are at the very bottom of a symmetrical triangle with MACD bullish divergence on the 4hr.
I wont be buying until we are in a confirmed bull market even if this means I miss the bottom.
But if I was buying this looks like a good setup
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