We can see a bit of a pump in price action on the 4hr chart for ether here. It appears to be breaking above the neckline of an inverse head and shoulders pattern(in yellow). Of course many times these patterns do not trigger their breakout on the first break above the neckline but rather dip back below it and wait until the 2nd or sometimes even 3rd break back above the neckline before confirming the breakout. Always a chance though this one could confirm on the first candle break above the neckline so its always wise to prepare for all possibilities. If it does indeed trigger the breakout of this 4hr inverse h&s pattern, the measured move target should carry price action above the neckline of a slightly larger double bottom pattern (in green). We’re this to happen, it could very well then flip that green neckline from resistance to support upon retesting it, thus triggering a double bottom breakout next which would take us to the green price target. Of course it could also trigger the breakout of the double bottom without retesting the green neckline, or it could break back below the green neckline and not actually trigger the double bottom breakout until the 2nd or even 3rd time above the green neckline (just like with the yellow inv h&s neckline)If I remember to be open to all of these possibilities, await for confirmation, and then make my move I’m sure I will play these 2 patterns wisely. We must also remember that a fakeout of the double bottom pattern or both patterns is also a possibility as well. The resistances/supports, price candles, and volume candles, should clue us into into which one of these possibilities will be the ultimate outcome soon enough *not financial advice*
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Eth retested the yellow neckline as support recently.
Not bullish ; don’t fall for that buy trap. We are still bearish
DrDovetail
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@Richburst9, yeah in the current market cycle, these 2 patterns could easily fail. Still wise to consider them validating though as both directions are possible at the moment. We are actually above a few key trendlines from the daily time frame as well that add to the bullish confluence. I didn’t show those trendlines on this post though because I didn’t want to make it hard to see these smaller time frame patterns. If the larger time frame trendlines hold support long enough I will post a follow up idea showing them.
Great_Scottsman
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@Richburst9, regardless still good for a short term trade then dump at your target.
DrDovetail
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@Great_Scottsman, well said. Even in the thick of a bear market you still have ebbs and flows.