While BTC has a somewhat similar formation, this market happens to be inside a while BTC is not. As I write continuously, best practices say buy supports, sell resistances, but always remember to consider context. In the current situation, there is a bit of a conflict. There is a shallow higher low forming within the 741 to 845 (.618 of recent structure). Often higher lows lead to higher highs, and in this case, since momentum is clearly , it is within reason to expect this resistance to break.
With that being said, I believe this market will follow BTC which is in a slightly better position to rally which can lead this market into the next reversal zone defined by the 876 boundary. Although a shallow higher low is a very aggressive trade, we are not issuing a buy signal for this market (especially since a signal was issued on BTC . See S.C.).
The more attractive location for a swing trade long is the 656 support (.382 of current structure). Price may not retrace back to that level though, especially if BTC pushes its . This is a tough call because as all the coins are poised to go higher, this particular market is less attractive because of the risk associated with such a location.
Best practices offer a general guide to positioning yourself alongside the intent of the market. Buying a strong market, one that makes higher lows and higher highs is appropriate, but context is an important consideration when it comes to assessing the risk. And when I mention risk, I am not just talking about the possible loss, but also the probability of the trade following through which is a different and tough to evaluate variable. If we are going to call an aggressive trade, we would rather choose BTC since it is in a more attractive position compared to this market. Remember, the purpose of these posts is to provide insight and perspective, because when it comes to taking risk, you have to be able to do that within the boundaries of your own tolerance and trading process. You must be able to make your own independent decisions, and know exactly why you make them and recognize when the market is not cooperating quickly. Check out S.C. for more.
I’m not saying to take undue risk, but if a support seems so solid as the 730 area for ETH now, I would feel that this level may be a good buy level. But that is purely my own feeling. I would like to see a dip to $650 levels, but having watched ETH savagely defend the $700-$730 support level so many times, it is beginning to convince me that it may be a good entry.
But knowing myself, I will wait for the drop to $650 that may likely not even happen. And I also believe you’re right- that even if we did see that area, I don’t think it will go past that. $500-600 area just doesn’t seem to be where the market wants to go, IMO. I suppose we will see. But even here, yes, you’re looking at an easy 2x return when we test the ATH again.
My advice to myself has been to never try and sell the absolute top or buy absolute the bottom. You will miss them almost every time without a lot of good luck. Better to buy a little higher and sell a little lower than you expect to preserve profits. Better to make a decent amount of money than try and squeeze another $10 out of it and end up losing 30% potential profit. Greed is an enemy that will get you rekt every time.