Given the recent price action of Ethereum and the markets, it seemed reasonable to check out how the asset's been doing lately - especially since the price of $ETH is rubbing against a long-term overhead horizontal resistance.
Ethereum on the Daily Resolution
In the chart above, we can see the price recently testing the EMA-50 (successfully) before heading directly up to re-test the overhead horizontal resistance at $1660 or so.
In just under a month, the price of Ethereum has bumped against this overhead horizontal resistance four times.
Momentum Indicator Overlays Support an Entry on the Daily
If we look at our various custom coded momentum indicators (which are overlaid on top of the price chart itself), we can see that they're near unanimous in signaling 'entry'.
Librehash Reversion Ribbon V2
What we're going to see below should spark some intrigue for readers.
As one can see above, the Librehash Reversion Ribbon V2:
1.) Has re-colored all of the candles red.
2.) The ribbon is showing a recent convergence of the ribbon (from 'red' to what should eventually be 'green' when the ribbon changes colors once it faster moving average crosses back over the slower one ). In laymen's terms, this exemplifies a major shift in sentiment for this asset (Ethereum).
3.) The color of the ribbon itself shifted from dark red to lighter red. This shift occurred on February 10th, 2023 (less than 5 days ago before we saw this shift in sentiment reflected in the price).
4.) The ribbon dipped just below the histogram, but it appears to be curving back upward, currently in a trajectory to cross back above the histogram (zero line).
Balance of Power RSI
This is a custom momentum indicator that we've created for the purpose of tracking the underlying buy/sell pressure for a given asset.
The biggest benefit conferred by this indicator is its ability to track underlying shifts in buying/selling activity well before other indicators can (like the RSI(14)).
In the photo above, we can see that the inflection point for this indicator was on February 13th, 2023.
In this case, the indicator was not premature in its signal as it aligned with the pivot in price action that occurred on that same day as well.
Balance of Power RSI on the Weekly Resolution
While the Balance of Power RSI on the daily resolution isn't too insightful, the weekly resolution provides us with a great look at an underlying shift from bullish exuberance to gradually increased bearish price action (selling).
Upon closer look we can see the shift in the Balance of Power RSI's trend (overall direction; think 'line of best fit').
Closer observation reveals that the 'second high' (localized) is lower than the first one.
Let's look at the other momentum indicators vs. the Balance of Power RSI over the same timeframe.
Librehash RSI(14)
Cryptomedication Volatility RSI
Which One Do We Trust?
As we can see from the charts above, the Balance of Power RSI strongly contradicts the Librehash RSI & Cryptomedication Volatility RSI.
In this case, we're going to place more weight on the Balance of Power RSI than the latter two indicators due to the fact that its specifically designed to track underlying changes in sentiments well ahead of other indicators.
Conclusion
We're going to abstain from entering into a position on Ethereum here.
It is likely that the price will continue to increase in the short term, but we can't see enough upside over the medium term to justify entry into a 'long' position at the time of writing.
We're also not going to be crazy enough to advocate for a short since the prevailing market sentiment seems to be overwhelmingly bullish at this point (compared to where it was toward the beginning to mid-Fall 2022).
Ethereum on the Daily Resolution
In the chart above, we can see the price recently testing the EMA-50 (successfully) before heading directly up to re-test the overhead horizontal resistance at $1660 or so.
In just under a month, the price of Ethereum has bumped against this overhead horizontal resistance four times.
Momentum Indicator Overlays Support an Entry on the Daily
If we look at our various custom coded momentum indicators (which are overlaid on top of the price chart itself), we can see that they're near unanimous in signaling 'entry'.
Librehash Reversion Ribbon V2
What we're going to see below should spark some intrigue for readers.
As one can see above, the Librehash Reversion Ribbon V2:
1.) Has re-colored all of the candles red.
2.) The ribbon is showing a recent convergence of the ribbon (from 'red' to what should eventually be 'green' when the ribbon changes colors once it faster moving average crosses back over the slower one ). In laymen's terms, this exemplifies a major shift in sentiment for this asset (Ethereum).
3.) The color of the ribbon itself shifted from dark red to lighter red. This shift occurred on February 10th, 2023 (less than 5 days ago before we saw this shift in sentiment reflected in the price).
4.) The ribbon dipped just below the histogram, but it appears to be curving back upward, currently in a trajectory to cross back above the histogram (zero line).
Balance of Power RSI
This is a custom momentum indicator that we've created for the purpose of tracking the underlying buy/sell pressure for a given asset.
The biggest benefit conferred by this indicator is its ability to track underlying shifts in buying/selling activity well before other indicators can (like the RSI(14)).
In the photo above, we can see that the inflection point for this indicator was on February 13th, 2023.
In this case, the indicator was not premature in its signal as it aligned with the pivot in price action that occurred on that same day as well.
Balance of Power RSI on the Weekly Resolution
While the Balance of Power RSI on the daily resolution isn't too insightful, the weekly resolution provides us with a great look at an underlying shift from bullish exuberance to gradually increased bearish price action (selling).
Upon closer look we can see the shift in the Balance of Power RSI's trend (overall direction; think 'line of best fit').
Closer observation reveals that the 'second high' (localized) is lower than the first one.
Let's look at the other momentum indicators vs. the Balance of Power RSI over the same timeframe.
Librehash RSI(14)
Cryptomedication Volatility RSI
Which One Do We Trust?
As we can see from the charts above, the Balance of Power RSI strongly contradicts the Librehash RSI & Cryptomedication Volatility RSI.
In this case, we're going to place more weight on the Balance of Power RSI than the latter two indicators due to the fact that its specifically designed to track underlying changes in sentiments well ahead of other indicators.
Conclusion
We're going to abstain from entering into a position on Ethereum here.
It is likely that the price will continue to increase in the short term, but we can't see enough upside over the medium term to justify entry into a 'long' position at the time of writing.
We're also not going to be crazy enough to advocate for a short since the prevailing market sentiment seems to be overwhelmingly bullish at this point (compared to where it was toward the beginning to mid-Fall 2022).