ETHUSD Update: 315 level double top is now generating a pin bar which still has 12 hours before is closes so it can change, BUT again just like BTC, it is worth noting because of the potential bearish trigger that can lead to real selling.
There was a nice move from the 286 support zone (that I wrote about previously) back up to 315. I haven't looked, but I am willing to bet there is a lot of chatter about "ETH Going To Moon!", and it's not happening. There is no moon, instead, there is a large resistance zone just above at the 320 to 350 area (.618 of recent bearish swing). This market has not even made it into that zone, and instead is in the process of forming a pin bar at a previous turning point which can solidify into a double top.
305 is the current low of the pin bar (but that number can be lower by the close of the candle). When this period closes, and the pin bar is still present, what ever low is in place at that time will be the short trigger. Then IF the market breaks 280, that will confirm the double top which would signal further weakness ahead. No moon.
Just like BTC, the bearish argument keeps building: Price has not even entered the major resistance zone of 320 to 350, price has possibly formed a double top at 315, possible large time frame pin bar forming, plus the 315 level is a lower high compared to 400. If I were shorting these markets, these would be the signs that I would need to see. The key is in the confirmations, just like in BTC, 4104 needs to be taken out, in this market its 280. The appearance of a bearish pattern like a pin bar or a double top alone is not enough. Confirmation implies the selling is significant and is likely to continue.
If 280 breaks, there is a .618 support zone (of recent bullish swing) at the 276 to 266 area where price may hesitate, but coming from a double top and lower high, it is reasonable to expect supports like this to break, which can take price back to the 243 to 223 support zone (.618 of entire bullish swing). Like I have written about previously, often the signs are in place before the market is surprised with significant selling and there are many signs at the moment. It is just a matter of a bearish catalyst.
The 243 to 223 area is an overlapping support zone and if price manages to retest, I am curious to see how it reacts since a C Wave would be in progress which can complete much lower. Any failed lows in this zone can possibly lead to a large double bottom or higher low formation, and that is something I would be interested in. Keep in mind this process can take time (days). According to my extension measurement, Wave 3 of C (which should be the next wave) is likely to complete around the 267 area (1.618), while Wave 5 of C can push to the 239 (2.618) area (this is based on the proportion of the of the price structure). This is just a possible scenario and is not a consideration until the bearish triggers I mentioned earlier are in effect.
In summary, these markets have been very slow in terms of swing trading, but bearish signs are beginning to accumulate. I am using this information to justify staying flat since I do not short these markets. There is plenty of action on the smaller time frames which I encourage everyone to participate in if you have the time and well thought out plan to guide you. My analysis can still serve as an overall context, especially for the levels. My plan is to stay out of any swing trades until this market presents a situation that shows clear potential to the upside for a reasonable amount of risk.
I keep seeing the same things and am very reluctant to get in or sell on these small dips with low volume both on ETH and BTC. But with the ETH fork on the 16th which seems to be regarded a positive thing by a wide concensus and the BTC fork later which looks likely to involve a lot of risk factors it feels like everyone is holding their breath and waiting for a trigger.
Sabibaby
⋅
@mkrivobarski, For every expert saying it will go up there's another one saying it'll go down. Buy a little bit each week and cancel out all the noise. Have some money on the side for major dips.
@MarcPMarkets while your analysis is detailed I think there has to be double TA on ETH which applies the price ratio on ETHBTC at this time given the BTC and ETH forks. The ratio is currently trying to close a 4hr candle above the 100 and 200sma, as well as the 38% retracement from the last swing high. The next target for this would be the 61% retracement (ignoring the 50% for now) at 0.07379 (BFX). There is indeed a massive bear mitigation block in the $320 range on most exchanges, however, in my experience trading these markets since 2013 is that one finds that the market moves (or MMs move) to fill these blocks. Currently this is where significant liquidity is and I expect it to get hit and volume to increase as a result. It is very likely that there are significant stops above the $315 level and a raid would take these out and fill that block, the market halting at this lever ($315) for a breather is no surprise to me at all to trap some shorts - liquidity would then come back for the next leg-up. I am most certainly not an EW expert and have never had much success applying them to crypto as I have always seen other macro factors such as news come in to scupper them. I prefer good old fibs, previous supports, (real simple stuff) and observing large players manipulating the order books. ETHKRW (20% daily volume) is now leading the price action across the board so I like to take queues from there as to where the 'market' (maker) wants us to go...
Thanks for the analysis and have a good weekend.
ervinleung
⋅
Hi Marc,
Btc just surpassed $4548, does this signify that it is safe to buy now for swing trading?
jasonnamek
⋅
Thanks Marc. Completely agree.
Brandon50115
⋅
Love your straightforward analysis. Dollar is getting stronger, which could add fuel to a move South. Thoughts?
mightytrader
⋅
@Brandon50115, Nah. If dollar is stronger, then people have more money to gamble. Also, Bitcoin & Ether marketcap is inflated with USDT. So when they say the market cap is 70 Billion for Bitcoin... a good chunk of it is from USDT Tethers.