faedicus
Short

Sorry bulls, not just yet

BITFINEX:ETHUSD   Ethereum / U.S. Dollar
Ethereum seems to have been forming a nice big ascending triangle over the last few days which would normally indicate a bullish breakout is imminent, but could this triangle be breaking into an ascending wedge instead to set the bulls up for a world of pain?

Arguments:
Bearishly diverging and faltering MACD
Heavily over-leveraged longs relative to shorts on bitfinex
Weak breakout from the upper horizontal resistance line
Faltering volume at the breakout
Detailed elliott wave count indicates an ending 5th wave diagonal (seen as an ascending wedge )

I really can't see a bullish argument for this weak of a breakout from this size of ascending triangle . With any ascending or descending triangle breakout the extent of the rally should be approximately equal to the width of the base of the triangle, which in this case would take us to about $200. I would expect to see a good chunk of this price action immediately at the breakout and... nothing. Zip. Nada. Bupkis.

A diagonal in Elliott wave is a structure in which wave 4 enters the territory of wave 1 with usually the 1st wave the longest and the 5th wave the shortest. It's often easy to spot from the drastic reduction in price increase from wave 1 to wave 3 and decreasing volume as the diagonal reaches it's apex. These structures typically end in a throw-over above the wedge and always retrace to at least the point of origin.

A break above $179 would invalidate this count as then wave 5 would exceed wave 3, so I'll ladder from $165 - $175. My 1st take-profit target is $120 and my 2nd is $107. After that, we'll see.

As always, manage your risk fellow traders!
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