ETHUSD update: Price has reached the bearish trend line and is now hesitating. This is not unusual and was expected, that is why we placed our swing trade target at 540. The question is: what is price more likely to do from here? Lower low? Higher low? Or continuation higher?
In case you have not been following our swing trade on S.C., it reached its 55 point profit target 2 days ago. The selection of that target was partly based on the bearish trend line.
The bearish trend line has been slightly compromised, but not enough to change our short term outlook. Bearish structure still dominates the short term momentum and until that changes, we are going to be very conservative as far as putting on new swing trades and their respective profit targets.
The short term bearish argument is as follows. If the 516 inside bar low is taken out, followed by the newly established bullish trend line, then this market is more likely to retest the 458 reversal zone boundary. In an extreme sell off, price can even test the 423 reversal zone boundary. This is the type of price action we wait for when it comes to our inventory building strategies.
Again, the selling scenarios are all IFs. Meanwhile, price is still within a broad support zone. The 544 to 464 area is the .618 of a recent bullish structure. As imprecise as this area may be, it cannot be ignored. It does present a chance that a higher low or failed low formation can materialize here. This is what the bears are not seeing and will be seriously caught off guard. Great scenario for people who hold inventory.
Another sign that canot be ignored is if the bullish trend line stays intact. A long signal off of the current inside bars can also catch many by surprise. If this happens, it will most likely be lead by a similar signal in BTC.
In summary, before any of these markets show real signs of recovery, they need to take out their trend resistance levels. In this case it is the 625 level which is the .382 of the recent bearish structure. Until then, we are likely to see wide range bound markets that do not make any real progress.
At S.C., we are not convinced of a completley bearish market because of 2 conditions. The first is the general bullish price location. The second is the premise that this market is forming a broad higher low formation which is also still in line with the Elliott Wave count I posted recently.
This type of environment is not without its opportunities, but patience and realistic expectations are key. We let the market tell its story and adjust to it, always evaluating the risks vs. potential rewards. No matter where it goes, we have a plan of action for that scenario.
Your own plan will serve you better than anything else. As I have been reminding our followers at S.C., use quiet time to plan ahead and to expand your knowledge. You will be much better prepared for when these markets get busy and the reactionary crowd returns.
So is this looking more like a short-term double bottom now with the big dip today? In that it matches pretty closely previous lows...
stosh776
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I started trading crypto recently and you are one of the sole traders who gives such beautifully clear, fair, honest and unemotional guidance. A pitch perfect tone cutting through the noise. I've learned so much. Thank You for being here!
apelord
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what did I say ;)
VaidoVeek
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Meanwhile in the BTC Chart :)
All bearish price action criteria's are lined up:
*Breakout from a curve trendline
*Breakout from a decent support $6666
*Breakout from a blue trendline
*Break below a round number $6500
*Break below EMA's
*Back to below the trendline from 17.12.2017 second touch 05.05.2018
Last hope for the bulls! Round number $6500 works as a support is STILL ALIVE but I think not for a long! :D
1-hour and 4-hour candles closed both at $6501!
BobsHappyTrading
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BTC is just having a happy little accident.
eleaf
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Looks like it passed down through the bullish trend line.
RicktheScientist
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Hello, thanks for the analysis.
When you speak of Elliott Waves are you speaking about the market in general?
If so, are you saying we are in the second retracement wave of a 5 impulse wave structure?
That would be very interesting.
I've counted it out so that for BTC we are in the 4th wave.
JackieHuynh
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hi, it will be nicer on the chart if your Fib shows percentage numbers. Thanks for the update