Looking at the 4-hour candle graph, there are two scenarios of how ETH can be traded. We can see higher lows and lower highs being formed in this chart. When such a pattern is seen, a wedge is formed. At the vertex of the wedge, ETH can either drop or increase.
The resistance line is valid as the 4-hour candle touches it thrice. However, the support line is not yet valid as the 4-hour candle only touches it twice.
Scenario 1 - It breaks the wedge and increases.
For this scenario, I would wait for 2 consecutive green 4-hour candles and then buy.
Scenario 2 - It breaks the wedge and drops in price.
Similarly, I would wait for 2 consecutive red 4-hour candles for this scenario and then sell(short).
Credits: TheSignalyst
Comment below which scenario is more likely to happen, in your opinion, and why? What is your trading plan?
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