Hi friends! I hope you are all doing well! Let's take a look at the four hour chart for Ethereum! If you recall from my last analysis, I was issuing a warning and emphasizing the fact that the awkward head and shoulders
pattern is still relevant, because there wasn't a sustained breakout above the (Previous High.) As you can see, ETH has now been rejected at the previous high, and is trending lower in a way that corresponds with the future completion of the right shoulder. At the moment, we can see that ETH has found some support at the 20 EMA
(in blue,) which, as you can see, has been an important reactionary level for Ethereum
. Right now, that is what we want to pay attention to. Looking at the volume
, we can see that it has been consistently declining, indicating increasing exhaustion as ETH pushes higher. Furthermore, we can see that a bearish
crossover has taken place on the MACD
(red circle,) in addition to a negative divergence (red dashes.) A negative divergence occurs when price is making higher highs, while momentum is making lower highs. It's an indication that the current move is unsustainable, and a correction may be imminent. Below the 20 EMA
, we should see ETH fall to the 50 EMA
(in orange,) and continue to fill in the right shoulder, before heading lower. On the contrary, for the bulls to continue the trend higher, they will need to get ETH above the previous high. Given the current overall weakness of the crypto space, and the technical data available, it's clear that the bears are gaining an edge in this market. Ethereum
is hanging out just below it's all time high, so if this market wants to move, it will be an easy target for the sellers — just something to think about.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, like, comment, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***