Minitech24
Short

Why I am bearish on ETH, (thorough analysis)

KRAKEN:ETHUSD   Ethereum / U.S. Dollar
People are calling the bottom, yet I am convinced that the bottom hasn't been nearly reached yet. I am going to explain to you why I think Ethereum is soon to drop heavily on to the ground.

First of all, this is what we're looking for in a bottom: A candlestick with a ridiculous Wick revealing major movement in both directions. We currently can't observe such a candle.



Now let's take a closer look at the overall bear market we're in. Using Elliot Waves we can see that Ethereum still has one extension wave left for completion.



I set the hypothetical bottom at the POC , I guess the adequate Interval is between USD 5 - USD 30.
Yes, single digit may be possible!

In classical technical analysis this new higher low and higher high may indicate a trend reversal. I, however, see this current "consolidation" as a normal ABC correction of wave 4 (---> following picture says point Nr 4, should be Nr . 3 though).



I don't believe that it will do the typical ABCDE ascending triangle consolidation because of the Fakeout at the resistance line that got denied and bearish divergences in the MACD .

Daily Chart:


In the 4hour chart the bearish divergence is even more apparent:


The support lines of this MACD trend are holding since March 2018! --> I therefore expect the worst if these get broken.

In addition, we can observe a hidden bearish divergence on the weekly Stoch RSI and RSI (even though it's less clear on the RSI ). Also the last weekly candle, ( shooting star following two rising candles) looks extremely bearish , but next weeks candle first has to confirm the bearish signal.



Taking a look at the ETH longs we can see that they have reached a new all time high accompanied with bearish divergences and an ascending wedge .



Shorts, on the other hand, are at an extreme low leaving much room open for shorts accumulation



Even if Ethereum manages to blast through the resistance line and reach even higher highs, the bear market isn't over unless it leaves the USD 205 mark far behind and goes beyond 220 USD, as it otherwise it may create a bearish bat , and/or even a bearish flag .



In conclusion, with all these indications in mind, I am extremely bearish on ETH and the overall crypto currency market. What goes up must come down, and if something rises this crazy in the financial markets as crypto did in 2017, it has to crash until it hurts really really bad.

In the end, this is just my analysis and maybe I am wrong, but this is what I'm observing and what I'm concluding since the bubble popped a year ago.
The bottom is in, simply because, when major coins had formed the head and shoulders pattern after the bottom had printed its 2018 low, it didn't drop as far as it should. Rather it did the opposite and marked the beginning of a new trend. It was a stand off between the bears and the bulls which marked the end of the bear market.

This stand off told the story that the bear market was over, the bulls drew a line in the sand and said we we will not budge. Nothing but support from here on up.

However, I am humble enough to admit I was wrong, if it does go south. If so, I would not mind that at all from a bullish stance towards the future of cryptocurrencies.
+1 Reply
@keifer, I don't really understand but which H&S do you mean?
Reply
keifer Minitech24
@Minitech24, LTC is known to lead the market. Here is one to look at.
Reply
keifer Minitech24
Reply
keifer Minitech24
@Minitech24, There are others, just loo for it.
Reply
keifer Minitech24
@Minitech24, Sorry bud, just to tired to explain further. I just got home from working shipyards and been a stress filled day. Honestly of hand I can't remember all that I had seen when I realised the bottom was in. The 1 indicator was like I had mentioned along with other things that I have read, heard, and come to know. If you follow top authors here at tradingview, they also believe this and prove it on their charts. https://www.tradingview.com/u/MagicPoopCannon/ is one to watch for, including a short list of: https://www.tradingview.com/u/BLUE43/ https://www.tradingview.com/u/alanmasters/ Cheers!
Reply
@keifer, no worries mate :) I got your point, however I’m very strict with H&S patterns so they have to look smth like that to be valid for me:


I rarely ever see them to be honest, except in 5minutes charts they happen quite often.

this is what I’m seeing, leaving out the last wave because it’s already super messy
I see a 3-3-5 flat correction:


from a pattern perspective I only saw wedges, no h&s
Reply
keifer Minitech24
@Minitech24, I knew that you would come back with that reply. lol Yes you have every right too. I know what you mean and agree but on the other hand, cryptos don't follow the rules as tightly as a text book.
Reply
keifer Minitech24
@Minitech24, BTW, I like your TA, which is why I follow you. Cheers Bud!
Reply
Home Stock Screener Forex Screener Crypto Screener Economic Calendar How It Works Chart Features Pricing House Rules Moderators Website & Broker Solutions Widgets Charting Solutions Help Center Feature Request Blog & News FAQ Wiki Twitter
Profile Profile Settings Account and Billing TradingView Coins My Support Tickets Help Center Ideas Published Followers Following Private Messages Chat Sign Out