Clearly, everything is following BTC and all have similar price action. Now that the first is broken, the next thing that needs to happen is the break of the 451 level (.382 of recent swing). As long as this level is not compromised, momentum is still in play. This is why I emphasized in my previous BTC report that it is risky to buy the initial lower high, unless you don't mind taking some pain.
The pain comes in the form of the next retrace or test to see if the bears are at full capacity (market establishes a lower low). If a new low cannot be established, then that is a sign that a short squeeze is likely. Being that the short interest is at an all time high in BTC , (the crowd is never right at tops and bottoms), it is just a matter of catalyst that can turn this market around fast.
Even if the 451 level does not break first, this market can still present a or failed low situation which would offer great buying opportunities in my opinion. The 374 support (old resistance/new support) and the 344 reversal zone boundary are the levels to watch for these two scenarios respectively. A decent short squeeze can take this market back up to the low 500's to test the broader which can serve as a good potential target to measure reward/risk from.
In summary, buying into lows of a environment can be tricky because there is no way to know if the low is in or if this market is going to push a new low. No matter what the trend, a retrace always presents a test that can be used to gauge the strength or lack of strength of the participants that are affecting price the most. Keep in mind, not all new lows are created equal. A failed low is a condition where price goes slightly lower which makes it look like the trend is continuing, only to reverse quickly which is often a sign of hidden strength and means that there are not enough new bears joining the party. Also remember that a bottom is a process, not an isolated event, which means patience often pays in these situations. If this market is bottoming here, there will be plenty of opportunities to get in at attractive reward/risk ratios.
Questions and comments welcome (to see a very broad view of this market with a wave count, see my chart on S.C.)
Been doing some amateur TA myself (I'm learning), would appreciate any thoughts you may have on what I'm seeing. I'm nowhere near good enough to see the finer detail that you do in candlestick patterns yet... So am perfectly happy to get ripped a new one by the experts here.
Not sure where we're going here on the daily.
I just drew some bear flags on the drop down from the huge H&S. Purposefully, I started with the flags themselves and left the flag stick until last when drawing, and started with the flag stick from the first descent (so as to sense check the measure of the drops). Then I copied and pasted the same flag stick on each flag at each stop down, the drops are pretty much bang on against that same measure from the first drop, all the way down.
The bear in me has been wondering about that pocket of support that converges with the tight falling wedge that we were in for a number of days, AND what I think is the mean trendline (in dashed pink). That might be the final drop for ETH, before a return to mean? The lower end of the bigger support area we're currently in represents an 80% drop from ATH.
Then again, my bullish side sees that the MACD looks like it's crossing up for the first time in a while, so maybe this is the rally that takes us out of the downtrend. Can't decide right now, so I'm waiting with most of my trading fiat on the sidelines. Though I do have a small position open which I'm looking to move out of at €350 unless things run up beyond that blue trend line convincingly.