ETH/USD Mini Head and shoulders forming?

BITSTAMP:ETHUSD   Ethereum / U.S. Dollar
Position: Leaning Bearish

Ethereum is having a similar formation to BTC , which is not surprising. When looking at the 4 hour chart, we have a potential mini head and shoulders pattern forming. It has pushed up and hit this trend line multiple times and failed to break upwards. In order for this pattern to hold any validity, we need it to break down below this support line at the $795-800 area. If it pushes below that we would get a push down further.

This analysis is a BIG IF. If it breaks down, we could see one of the scenarios that I drew in the chart play out, there will be a bounce off of the 600 area, but will it just move down again? Or will it break that small upward trendline and head up? A lot of unknown variables at this point. I will be keeping my eye on this one to see if it start breaking down and what to look for to get back in. Because this thing has the potential to break down ALL THE WAY to the 350 area, a martingale strategy is vital. If you go in heavy at 600, make sure you watch those zones with caution. My points I will start entering is 730, 630, 511, 430 and down at the 350 areas. (If you don't know what a martingale strategy is, BE SURE to read up on it.)

Happy Trading,

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