Weekly Bullish Divergence Predicts ETH Uptrend

I am pretty bearish, but as part of my due diligence I was checking out the arguments for going long on ETHUSD and I found a great and fundamental post by Ins1d1a ETHUSD - Weekly RSI bullish divergence fractal. The fellow only has two posts and I a bit worried by a name that could either be a play on “insider” or “insidious” but the price action is the price action. I decided to use his post as inspiration and here we are.

I am paying attention to 3 things in main chart.
Subtle Bullish divergence on the weekly timeframe - It predicted a massive uptrend before and a real end to the bear market and hopefully it will do so again.
Incoming bullish cross on the MACD – MACD crosses by themselves are not perfect and generally bearish crosses are more powerful than bullish crosses but we do have the bullish divergence as back up
A massive decline in the Average True Range. Generally large price movements occur after a tightening of the price action and so far the simplest measure I have found has been the ATR. The decline in ATR is much tighter than the decline we saw in 2016. As I am new to using the ATR I don’t know if that matters for anything but it is something I am keeping in the back of my head.
I decided to tunnel down to the 4H timeframe and take a closer look at what happened in 2016 and the chart looks familiar enough. The thick bold blue lines are refined from the weekly chart to make sure they match up properly because some accuracy is lost when you drop time frames, and the thin blue lines were added to show the tightening price action and resulting falling wedge.

This is somewhat concerning to me because the last couple of times I have charted the price action I have viewed the price action as a symmetrical triangle that predicts a continuation of a down trend. This chart is from an update to my post Hidden Divergence and Where is the Bull Rune Money Coming from?

Either way, with a symmetrical triangle or with a falling wedge we are expecting another drop in price here shortly because the nature of the drop is very important and will have to be watched carefully. We could have the bullish divergence build up on the weekly charts for another two weeks if the wedge is the formation in play.

The weekly chart for Bitcoin isn’t very helpful, as the price action and RSI don’t really tell us anything. The MACD action is so choppy it is practically worthless.

Much more intersting are the charts of ETHBTC, in part because the bullish divergence we are looking for isn’t congruent between the two charts. Below is the Bittrex chart. The most recent ETHBTC uptrend didn’t have clear bullish divergence, but we can see clearly that the dip in price action was much deeper than the dip in the indicator, and a bull run occurred. We also see that we have true but sublte bullish divergence on the weekly chart, right now. We also see the MACD bullish cross incoming.

On Binnance we see that there was clear bullish divergence for the last bull run but we don’t have enough history to see how the MACD was acting. It looks like both ETHUSD and ETHBTC are setting up for at least and uptrend here in the next two weeks. No guarantees that this uptrend is a new Bull Run but it will be interesting to see how this breaks down. It would be very lucrative if ETHUSD and BTCUSD break in opposite directions and we trade the ETHBTC pairing.

Comment:

The falling wedge didn't form and instead we had to symetrical trianles, one continued a down trend, and the other was consolidation and we leaked out the crux before going boom. Last time I we had the conditions in the original post ( Weekly timeframe MACD Bullish Cross and Bullish Divergence) we consolidated for 22 days before going on a tear and now we are about to go on another tear. Time to strap in and enjoy the ride. Not financial advice but I might have a few extra dollars for a scotch myself.