Hi friends! Welcome to this update analysis on Ethereum! Let's get right to it! Looking at the four hour chart, you can see that ETH broke down hard below the neckline of the massive head and shoulders pattern. If you recall from my last post, I said "If ETH breaks down, the initial support is at the 78.6% retrace, followed by the 491.90 level." ETH actually took out both of those levels, as it fell to a low of 452.32. As you can see, ETH printed a sharp reversal off of that low, but it is running into massive overhead resistance below the neckline of the big head and shoulders pattern. You can see that the 20 EMA (in blue) is falling into the current price action, and just above that, we have the neckline resistance (in red.) With that said, if ETH rallies up to the neckline, and gets rejected there, that would be ENORMOUSLY bearish price action. That would actually be a confirmation that the neckline is now resistance, and we would be very likely to see some intense selling afterward.
As I've stated on my other charts, there is technically no reason to believe that the selloff is complete yet. We have printed a lower low on the chart, and we have not printed a higher high. So, as the chart currently stands, we are still in the midst of a nasty downtrend. Sure the bottom COULD be in, but there is currently no technical evidence to confirm that. Therefore, I will personally remain a seller of rallies. If ETH breaks back above the neckline resistance, that would be a substantial development that would warrant a reassessment of the bullish potential in ETH. Technically, the safest place to go long, would be at a breakout above the blue downtrend channel. Until that happens, it's very clear that the bears are in full control of this market. The ETH chart is overwhelmed with bearish formations, so don't let the current bounce blind you from seeing that.
On the MACD, there is a bullish divergence that has been forming, and we just printed a bullish crossover. So, the underlying sell side momentum is dwindling, but that doesn't mean that the selling won't continue, or that the sell side momentum will not increase. With such a bearish chart staring me in the face, I can't give much credence to divergences on the MACD. If you know anything about divergences, they are generally unreliable, unless chart formations concur with the divergence. In terms of ETH, that is currently not the case.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, 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.***
-Magic loves you-
-JD-
As I've stated on my other charts, there is technically no reason to believe that the selloff is complete yet. We have printed a lower low on the chart, and we have not printed a higher high. So, as the chart currently stands, we are still in the midst of a nasty downtrend. Sure the bottom COULD be in, but there is currently no technical evidence to confirm that. Therefore, I will personally remain a seller of rallies. If ETH breaks back above the neckline resistance, that would be a substantial development that would warrant a reassessment of the bullish potential in ETH. Technically, the safest place to go long, would be at a breakout above the blue downtrend channel. Until that happens, it's very clear that the bears are in full control of this market. The ETH chart is overwhelmed with bearish formations, so don't let the current bounce blind you from seeing that.
On the MACD, there is a bullish divergence that has been forming, and we just printed a bullish crossover. So, the underlying sell side momentum is dwindling, but that doesn't mean that the selling won't continue, or that the sell side momentum will not increase. With such a bearish chart staring me in the face, I can't give much credence to divergences on the MACD. If you know anything about divergences, they are generally unreliable, unless chart formations concur with the divergence. In terms of ETH, that is currently not the case.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, 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.***
-Magic loves you-
-JD-