ETHUSD Update: Double top has now appeared within the 320 to 352 resistance zone, just under the 357 extension. This is a bearish sign and can lead to a retest of the low 300s which is the area I am looking for a possible swing trade long.
Now keep in mind, this double top does not mean the strength of this market is over, but it is a formation that signals weakness at the moment. A retrace to 315 can present a double bottom and possible swing trade long opportunity as well, it all depends on the price action IF the market can retest that level.
The other factor is BTC because if bearish momentum takes it to much lower prices, this market may get affected as well. If that is happening during a retest of the low 300s, I will most likely avoid until BTC is reversing also. The relationship between these two coins is far from predictable, but I would rather observe it while flat, than stuck in a position that has more factors against me.
The current levels still offer a chance to lock in some profit for those who got in a much lower prices, BUT if you intend to hold some as an investment, this does not mean sell it all and try to get back in. Holding a core position means you allocate a small percentage of your capital to holding some no matter what, and then adding to the position at better prices. Locking in profit on a small portion of the position never hurts, and reduces risk which is never a bad thing either.
If this market breaks below the 300 level, then the next support is the 295 level which is the .382 of the entire bullish swing. If this market is going have a chance at pushing a new high, it needs to maintain a support above this level. A break below will increase the chances that this market will go back into a consolidation rather than retest the highs.
In summary, this market is now showing a clear bearish reversal sign which is the double top along with the fact that price is within a major resistance zone. These factors point to lower prices ahead which may offer a swing trade long opportunity if a bullish reversal appears around the 315 level or low 300s. The idea is to capture an attempt to retest the highs which is a reasonable expectation based on recent price structure. Also keep the other eye on the BTC market, because any major support breaks there can work against the support scenario that I am looking for.
Doesn’t the positive news of a smooth and successful execution of the fork weigh in here?
Or is it irrelevant to the pure Technical Analysis method?
Iruwen
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@Farrokh.ansari.1977, it actually wasn't that smooth imo, first it was delayed, then there was a critical last minute fix. And Metropolis wasn't that interesting to begin with, very technical stuff. Casper might cause a lot more fomo.
farrokh.ansari.1977
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@Iruwen, I agree with you. We had a negative tension due to the unpredicted tricky software stuff that happened immediately "prior" to the fork (Bad News). That fueled some fear and restraint among people which was negative. Yet perhaps much of that software trouble was resolved prior to the fork and saved the process. Just now that the fork has been carried out they are reporting it as smooth and successful (Good News).
*** What I wonder is if this late "Good News" weighs enough to keep this mini-raley going.
The more important general point for me, of which this question is only an example, is how we should "React" to such true news. "How much weight should a news have to make a professional Technical Analyst choose a different scenario?"
Thank you and thanks to MarcPMarkets
dalmazio
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@Farrokh.ansari.1977, @Iruwen's answer below nails it re: smoothness of fork. But the other thing is that markets price all these things in. So the run up to $350+ highs was assuming the best outcome + some FOMO. After the fork, there is no longer anything to miss out on, and if price drops (which it appears to be doing) then fundamentals weren't/aren't yet strong enough to warrant a $350+ price independent of any FOMO surrounding the fork.
This might be a classic example of buy the rumor/lead-up, sell the news/fact. Volume still looks terribly low to even conceive of retesting ATH. It seems to me ETH needs a fresh injection of capital. And that will probably only happen if it has a deep correction first.
With many thanks,I do not know how to appologize for my very late reply. I was jammed in some other threads.
But as dear your above insight is, we see your viewpoint is still crucial for analysis of the preceding to ETH fork, the one BTC held today, Nov 24.
You educate me. Thanks
dalmazio
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@Farrokh.ansari.1977, no worries, and you're very welcome.
TEXANUSAPROUD
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Your writing skills are commendable....love how you always summarize at the end!
MarcPMarkets
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@marie21962, hehe thanks for noticing. I do that for people so they don't have to read all the details in the earlier paragraphs if they don't feel like reading a lot. Hehe.
DARK-MAGE
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Bearish bias in most of your analysis. Hopefully it goes up to prove you wrong.
iLoveLobster
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Jeez, some people really take it to heart about peoples personal opinions as fact. Take it for what it is and move on. If you wanted to follow/comment on perspectives to adhere to your own bias you can do that by changing the dropdown to only show "People that I follow".
Or is it irrelevant to the pure Technical Analysis method?