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In this important ETH analysis, we're going to look at the macro picture with ETH: Where we have been, and where we're going.
So, let's get it going, and let's start of with the bottom in 2016: We had been at $5,81. From those lows, ETH saw a 280x move up to the highs in 2018 to $1,400.
With the logarithmic scale, we can perfectly see that on the way to the tops, we have a very nice & clear Ascending Triangle, which spans from the summer of 2017 up to November 2017. Now the top resistance range is important to remember guys, as we will see later: It goes from $350-$400.
This huge get's eventually broken on the Weekly with amazing follow-through to the higher High of $1,400, giving 260% profit. This marks the top, and following we get a series of LH & LL into a downtrend, marking the bottom at $360 eventually: This is exactly our previous breakout-range of the resistance, turning it now into support. => This is why S&R zones are crucial in trading.
Following that bottom bounce, we see a nice rally towards $800, where ETH more than doubles, building a lower High on the Weekly. The bulls give the whole move back, eventually coming to the previous bottom range of support, and breaking it in July, even before grandpa BTC , who could hold the $6k range up until November 2018.
Therefore it is extremely important, too look at the direct correlation to Bitcoin, and see, what has been going on since Ethereum entered the market:
As we can see here clearly, we have been inside a textbook Equilibrium (tightening price range) since the huge ETH explosion in 2017, reaching the highs at 0.14 BTC , and between 0.025 BTC . From that zone, ETH tightened into 0,054 into April 2018, eventually breaking the EQ in the August of 2018 (I never forget this, I was in Napoli visiting the Vesuvius when this 'eruption' happened, it was a good sign already ;)).
Since breaking that bottom, we have halved: So if you were a HODLer having his funds in BTC vs. ETH: The break of the 0.054 was a clear sign to shift your funds into BTC . Of course, this does not equal strength in USD. It just meant that Bitcoin was falling less than ETH in USD -but both were falling.
If you think now this is the end, ETH/BTC will not fall lower -look closely. Shifting our chart to logarithmic scale again, we can clearly see the descending pattern we're currently in at with the Equilibrium spanning from 0.04 to 0.025 ( lila box): A break of the bottom can lead to another 50% loss towards 0.012 BTC , and from there even another 40% towards 0.007 BTC .
If the bulls on the other hand, manage to bounce off from the bottom, we have the potential to eventually break the EQ at 0.04 and move towards the previous summer lows of 0.054, making it to an S&R zone now. This would give the bulls solid 40% profit towards BTC , and even more than 100% if we go further. => But since we're descending, this is the less likely scenario right now.
Now let's have a look a the overall strength in terms of Fibonacci: Are we still in Bull Market with ETH?
If we measure the whole bull move up, from $5,81 to $1,400, we can clearly see that we have broken the Golden Pocket of the 61,8% retracement. If Fibonacci doesn't tell you much, take your simple human logic: We have given back more than 50% of the move, so therefore, it's fair to say that this is not a core move any more.
So now that we have seen that this is not a core move any more, we take the reverse: We measure up from the bottom to see, if we're still in a core move:
We can perfectly see, that the bear market is still valid: We would have to break $900 to reverse the bear market. Or if we take simple percentages, we should break above 50% of the move, which would be $750.
Now this doesn't mean that we haven't made a trend change on the Weekly yet -because we definitely have, and ETH gave awesome profit already, doubling from the lows at $80 to $160. Breaking the $160 was the trend change on the weekly, making higher Highs to $180, for the first time since the Highs at $1,400.
What is the current stage?
If we zoom into the Weekly /indecision candles, we can see the nice Daily Equilibrium that has shaped up: A break above $280 could lead to the magic S&R zone at $350-400: It would give 30% and respectively 40% of profit.
A break underneath the EQ at $230 would lead to the previous S&R zones on the Weekly, that we had already talked about.
What is going on fundamentally?
While Ethereum managed to cement it's place as the leading smart contract platform, and esp . for ICO's, that had taken place throughout 2017-2018, it is still struggling to represent itself.
Wilson, well-know US-investor from Union Square Ventures, which has invested in Coinbase & Twitter in early stage, hugely criticized Vitalik & his team, for not being able to market Ethereum properly, quote: <If Ethereum was doing was EOS is doing, they'd be crushing it, but they don't. If I could just go to him and tell him: 'Look, this thing that you've got going in Switzerland, it's not working, fire those f***ers, and put somebody great in there, to help you build this thing into a monster,..'> https://avc.com/2019/03/video-of-the-wee...
It is a very emotional reaction from , since USV through its indirect investments into Multicoin Capital, is holding a lot of ETH as it seems. But it is very representative of the market, since we have hugely given back compared to BTC .
Vitalik and his team, now probably more aware of that criticism, have responded with a detailed 12-month plan for the coming year, where they, among other things, wanna work on ETH 2.0:
- Client Teams,
- VDF (Verifiable Delay Function),
- Documentation & Communication,
- Layer 2: State Channels & Plasma
Conclusion: It remains to be seen, if Vitalik -who is more of a genius & evangelist than a business guy -can further keep Ethereum's role going on as the Nr .2 behind grandpa Bitcoin . From a technical perspective: if BTC shows further strength, ETH will definitely have the chance to reach the discussed zones, giving awesome profit potential for traders.
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