[ETH] Levels and Zones to Watch if (when) ETH Continues Down
Updated the key levels I'm watching for potential bounces, reversals, consolidations, etc. on ETHUSD as we wait for consolidation to end after heavy selling last couple days. The last chart I posted showed a channel, which I was surprised had broken down so quickly and violently just after already strong bear moves. Volume is spiking here on the daily chart.
As you can see I've got a No Buy Zone labeled, which we are currently consolidating right at the top of. This consolidation could be prolonged quite a while and might rotated about the $590 axis. The zone had no resistance on the way up and likely needs to be "Traded Out" so to speak.
Below that, a POTENTIAL Reversal Zone could be around the top of the massive green candle we had in early April. That movement was so abnormal (in BTC anyways) that I think it's likely we'll go down to at least test that price before buying significantly.
Scenarios:
1) We move sideways for a long time in the No Buy Zone then grind back upwards. (BULL, 50/50 CHANCE)
2) Rocket out above $600, little resistance, retest $590, strong support, Lambos on the Moon, yada yada yada. (STRONG BULL, LOW CHANCE)
3) Continuation Pattern forms and breaks down from No Buy Zone, then look for possibilities of Potential Reversals in the $475-ish area. This would allow us to establish a higher low and maintain convergence pattern towards an equilibrium. (BEAR, HIGH CHANCE)
4) Current leg of downtrend doesn't last, consolidation is short, drop straight through under $500 in the next couple days. From there, who knows tbh. Perhaps we bounce of the solid red line of long-term support, but it's too soon to say, could go even lower afterwards even. (STRONG BEAR, 50/50 CHANCE)
Bottom line, at this point the bears clearly have the floor, we'll see where they place it.
As you can see I've got a No Buy Zone labeled, which we are currently consolidating right at the top of. This consolidation could be prolonged quite a while and might rotated about the $590 axis. The zone had no resistance on the way up and likely needs to be "Traded Out" so to speak.
Below that, a POTENTIAL Reversal Zone could be around the top of the massive green candle we had in early April. That movement was so abnormal (in BTC anyways) that I think it's likely we'll go down to at least test that price before buying significantly.
Scenarios:
1) We move sideways for a long time in the No Buy Zone then grind back upwards. (BULL, 50/50 CHANCE)
2) Rocket out above $600, little resistance, retest $590, strong support, Lambos on the Moon, yada yada yada. (STRONG BULL, LOW CHANCE)
3) Continuation Pattern forms and breaks down from No Buy Zone, then look for possibilities of Potential Reversals in the $475-ish area. This would allow us to establish a higher low and maintain convergence pattern towards an equilibrium. (BEAR, HIGH CHANCE)
4) Current leg of downtrend doesn't last, consolidation is short, drop straight through under $500 in the next couple days. From there, who knows tbh. Perhaps we bounce of the solid red line of long-term support, but it's too soon to say, could go even lower afterwards even. (STRONG BEAR, 50/50 CHANCE)
Bottom line, at this point the bears clearly have the floor, we'll see where they place it.
Comment:
Typo in scenario #4: Current leg of downtrend doesn't stop*
Comment:
So far my prediction on short term action and consolidation about the $590 axis seems to have come true. Still difficult to tell what's next at this point.
Comment:
Still not trading here. Take a look at the potential bull case for BTC in the latest post. It's hypothetical and not a lot of evidence for reversal right now but always gotta think from both sides of the chess board.
![[BTC] Bullish Signs in Bearish Continuation Pattern?](https://s3.tradingview.com/3/3GKPMVAP_big.png)
Comment:
Scenario #3 is playing out now, the one which I gave the highest probability of occuring. Now that ETH has broke down from the No Buy Zone, we could be close to seeing a reversal to the upside.
Lets watch and make sure this doesn't turn into the Very Bearish Scenario #4 before buying back in. Today's candle is a strong downward move with above average volume and there is still 5 hours until its close (UTC).
I think a reversal from around this price level in the near future will have less significant volume on the lower time frames, but the further down we go the more i'll be looking at volume spikes as an indication of momentum changes.
Lets watch and make sure this doesn't turn into the Very Bearish Scenario #4 before buying back in. Today's candle is a strong downward move with above average volume and there is still 5 hours until its close (UTC).
I think a reversal from around this price level in the near future will have less significant volume on the lower time frames, but the further down we go the more i'll be looking at volume spikes as an indication of momentum changes.
