ETH Reversal Zone: Back To 1800?

Ethereum got everyone's attention (and money) as it made an attempt to push 2200 on Friday, but no one seems to effectively address the risk. The 2000 to 2200 AREA is a high risk and highly vulnerable area for new longs. A retrace from this zone can see a test of the 1800s in the coming week.

The upper blue rectangle represents a proportional reversal zone. It highlights where fake outs or rejection off of a resistance area is most likely to unfold. ETH has two previous attempts that were rejected in this area, and that price overlap is certainly not a positive sign.

At this time, the 1800 area (noted by smaller rectangle) is where the next support can be anticipated. Not only is there a proportional reason, but an ascending trend line happens to be in that area as well. The key is to wait for price to prove itself there, by confirming some kind of reversal pattern. Buying the level out right has a more random outcome.

Why buy the high when probability favors the pullback? I trade rules and much of the time, the market does not align with the rules. These rules help to isolate high probability setups and help me assume risk when it makes the most sense relative to the market intent. At the moment, Bitcoin and the alts are in high risk locations, not high probability. So the solution is simple: I wait for better prices. EVEN if that means the market runs without me.

What Are You Afraid Of?

The fear of missing out is an inherent part of human nature. It is a powerful irrational motivator that salespeople have capitalized on since the beginning of human civilization. If you miss an opportunity though, in this case a market move, what do you actually lose? Is your house or car confiscated? Is your food taken away? Are any rights, privileges or freedoms revoked? You lose NOTHING. We all know this, yet people still can't control themselves when ETH is flirting with all time highs and favors lower prices over the short term.

Stop being at the mercy of human nature and learn to WAIT. It has a lot of benefits, especially in a highly random environment such as a financial market. If the market runs away, let it go. Focus on risk, the only variable we can control. The hardest part of this game is not technical, it is getting over the emotional obstacles.

Thank you for considering my analysis and perspective. I hope you find it helpful.