ETH is approaching our bottom target of just above this 300 area. While BTC is also approaching this 6k low. This should (key word here, nothing is guaranteed) provide a bounce. I will tell you exactly how I have my buys laddered and why. You can do what you like. I have an average price entry at $533. I will be splitting my large 30% portfolio buy at $326 to 15% here at 375 and 15% at 326. This sell off is very much getting into oversold territory with little to no bounce. I don't know exactly when it's going to turn which is why I am doing that. As much as I would like to think that my 326 buy will be absolutely dead on perfect. It bounced hard last time off of $450 and if I hadn't have split it then, I wouldn't have gotten filled. It's really hard to predict exactly where these markets will bounce precisely, which is why I ladder my buys. The other reason I do this, is sometimes you are to late when you wait for confirmation. I give you the Feb 2nd bounce as an example. It bounced hard off that level and fast, there wasn't much confirmation to wait for.
Here are some further reasons for a bounce: 1. Look at RSI historically and match it up with these previous low points. It's been a good indicator of getting a solid bounce. 2. MACD is waiting to cross over for a move to the upside. This would be a confirming upside indicator 3. This area above $300 proved as major support if you go back farther. Some Level 2 Order analysis. 4. If you pull up GDAX (they are one of the largest crypto fiat providers) and zoom out on the sellers, we only have 6 million in sellers up to $520. THATS IT. Is this going to change as price moves up? Absolutely, but what this tells me is that when it start to reverse, it's probably going to quicker once these panic seller(s) are done, which is why I am splitting my buys. So for a $150 move to the upside, it takes 6 million, while a comparative move to drive the market down to $350 only takes 6 million. That's a huge difference in price movement.
Things to look for to confirm a move to the upside and my exit point. Basically, if we break these 2 smaller trend lines, we should get a move to the $500 area. This is where I will be looking to get out. Profit's will be minimal, but I will be looking for a new entry point at that juncture.
Happy Trading. Don't stress, pick your points, and don't use leverage! -Sherem
This worked very well last time -
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If we bust this 405 level, the temp downward trendline will be broken and this near term resistance level, I would imagine we would move to the 440 area next to test that trend line and resistance zone
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We busted this short term trendline and on GDAX it even showed a spike up to 440 to the second trend line I had drawn. With that, once we get past this 440-450 area as a confirmed break out, next target is 500.
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Anywhere between now and the 300 area is possible for a bounce, we are in oversold territory. Since it is a holiday weekend, I would imagine a large bounce wouldn't happen until later when the Asian trading session starts, but we will see.
If you are trading with stops, the proper stop is under 300 with entries down to that area. If you are trading martingale style, you need buys laddered down to the 200 area. I have my final buys at 326 and 226.
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chart update
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Adjusted my lines, we should see support at this 395-405 level. Not surprised we are doing this before continuing up again.
Interesting analysis. The bull market lasted a few months. Can the bearish market last only a couple? Probably not, so your target here is just 10-20% before it comes down falling again to continue in the downtrend channel? Also, when analysing ETH, wouldn't it be helpful to check ETH/BTC since BTC is king? Usually they go up/down together in a similar ration, but sometimes it's completely different.... Thank you!
Sherem
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@alansoft, The bull market was longer than just a few months, but I get what you mean that it was on fire for just a few. I think the bear market will continue for some time after this, but we will get bounces and plenty of volatility in the meantime. My target is 20% on the upside, but I think it's possible that we push all the way to 675. For my positions, I want to reset my martingale strategy and reset my entry points for the fact that we could easily get another wave down. Even from here we could, but there are a lot of techincals indicating a bounce, but I do have buys at 326 and some a bit further down than that even, just in case. I preach it a lot, but I use a martingale strategy for entering my positions, I recommend reading up on it.
I do check all the other pairs, if you read my analysis on LTC and BTC, they are quite similar. They are all throwing reversal signals. I did do a correlation write up a while ago, another one is almost due, but not quite. ETH/BTC correlates to both in terms of velocity and makes one move more up or more down. IE; One reason ETH has moved past its double bottom and not BTC is we have had ETH/BTC moving down heavily which has bolstered BTC and exacerbated ETH to the downside as people shift there ETH over to BTC. It doesn't necessarily mean one pair won't go up because of it. We are approaching a massive trendline and support in ETH/BTC right now, which also puts the probability higher of a bounce in the usd pairs, as ETH/BTC moves sideways or possibly comes off the lows which would help ETH.