ETHUSD Update: Higher low reversal is established and upswing continues into minor resistance area. New structure on the hourly chart indicates further strength and offers attractive areas to buy.
Yesterday between 5 and 7 PM EST (UTC -4) price failed to make a new minor low at the 187 area and reversed. A new upswing emerged and at 3 AM, and presented a higher low (HL) at the 200 price level which is the .618 of the new upswing (Picture perfect reversal and one of my favorite structures) . This was a great place to open a position using 187 as your reference point for a stop. If you missed this like me (because I want nothing to do with a computer or a phone at 3 AM), there are new support levels to consider moving forward.
IF price retraces into the 214 area (.382) of new upswing, and presents a reversal pattern or candle, I will be looking for longs here, with a stop at 194. On the upside my first target is 241, which is the major trend resistance that was recently compromised. RR is slightly over 1:1, and then the rest of the position will attempt to hold for new highs. Keep in mind price may not reverse at 214, and may retest the .618 area of the recent upswing which is the 204 to 196 area support.
This 204 to 196 is the secondary support area that I will watch for reversals and possible long entry. Risk/reward is much more attractive here since I can use 187 as my stop while using 241 as my first target.
There is some minor overhead resistance which is related to the .618 of the recent bearish swing which begins at the 230 area. In strong markets, I expect supports to hold and resistances to break and since 230 is not a major resistance, a push through to retest 241 is reasonable.
Managing risk is not always about your stop placement, but also about how you manage your size and how conservative/aggressive you choose to be. On aggressive trades, often I will take a smaller position, and if I'm right, I can always add either on a minor retracement or even a breakout. If I'm wrong, I lose much less than I normally would even with a wide stop. I mention this because it is hard to report all the details about getting into and managing a trade, especially on smaller time frames like an hourly or less.
We all know things change very quickly in these markets and this bullish scenario that I am anticipating will no longer be in play if price declines below the 187 swing low because a strong market should not be pushing lows. The BTC community can push a new drama on the market, and next thing you know we have another consolidation. The best analysis in the world cannot anticipate BTC drama, something to remember.
In summary, this market has a presented bullish reversal structure on this time frame which indicates further strength. I am looking to enter if price presents opportunities at the 214 and/or 204 areas. My intention is to sell some to lock in profit using 241 as a target, and then to hold the rest. Any break back below the swing low of 187, then this scenario is cancelled out.
$3 million buy order in process on Kraken
....bearish? Lol. Best to all. We should see $300 soon.
MarcPMarkets
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@NoCode326, I think he is referring to the minor resistance in the 241 area because I was never big picture bearish on this market.
PositiveVibe
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Props to Marc.... looks like he was right about eth being bearish. I'm super interested to see what Asia thinks tonight. Hoping that they break it free but have my doubts right now
PhamTheAnh
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"I am looking to enter if price presents opportunities at the 214 and/or 204 areas" Does this mean if the price falls to this area, you will buy in and sell target will be 241? If it reached 241 first, should I sell and rebuy at this area?
MarcPMarkets
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@PhamTheAnh, The 214 and 204 areas are supports. IF price goes there, I will not just get in. I will wait for a reversal there which can come in the form of a double bottom or higher low on this time frame, or possibly a 15 minute. So if it reaches one of these levels, I don't just buy because price can fall right through. I need to know that price is stabilizing, and that is what the reversal pattern indicates for me. IF the market offers this signal, and I get long, my first target is 241. I intend to lock in some profit, which reduces my risk on the rest of my position. From there, I will hold on and see if this market can work its way to back into the 300s. I prefer attractive risk/reward and won't just buy at any price. I need to see that the buyers are supporting my idea, then I can justify taking a risk.
machinelearnt
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Lots of great info, thanks for sharing.
MarcPMarkets
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@SkylerECU,You're welcome. I'm glad you find it helpful.