Ethereum is moving inside of descending channel and with simple trading strategy it can be very successful time to trade even if the price moves down.
A descending channel is a chart pattern formed from two downward trendlines drawn above and below a price representing resistance and support levels. The descending channel pattern is also known as a “falling channel” or “channel down“.
On this chart I use only RSI indicator for entry and exit points, while MACD is there only for bias (in negative territory it charts bearish trend). The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. An asset is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.
With that in mind, you can simply draw support and resistance lines of the channel and trade inside of it with short and long setups until the price breaks out from the pattern. Stop loss should be used accordingly when you enter position.
On the chart you can see that the price turned down when it reached resistance area and when RSI was indicating “overbought” levels and the price turned up when the RSI was marking “oversold” levels and when it touched support level of down trendline. Until the price stays in the channel you can use this tool to trade, but watch out for breakouts as usually they are big with greater volume behind, so use your SL in place.
A descending channel is a chart pattern formed from two downward trendlines drawn above and below a price representing resistance and support levels. The descending channel pattern is also known as a “falling channel” or “channel down“.
On this chart I use only RSI indicator for entry and exit points, while MACD is there only for bias (in negative territory it charts bearish trend). The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes to evaluate overbought or oversold conditions in the price of a stock or other asset. The RSI is displayed as an oscillator (a line graph that moves between two extremes) and can have a reading from 0 to 100. An asset is usually considered overbought when the RSI is above 70% and oversold when it is below 30%.
With that in mind, you can simply draw support and resistance lines of the channel and trade inside of it with short and long setups until the price breaks out from the pattern. Stop loss should be used accordingly when you enter position.
On the chart you can see that the price turned down when it reached resistance area and when RSI was indicating “overbought” levels and the price turned up when the RSI was marking “oversold” levels and when it touched support level of down trendline. Until the price stays in the channel you can use this tool to trade, but watch out for breakouts as usually they are big with greater volume behind, so use your SL in place.