Week 1 of 21 - Ethereum Surveillance Report
Good morning or afternoon depending where in the world you reside.
Week in Crypto (Top 3 Events):
#1 - Baakt continues to make headlines and progress in launching their proprietary digital asset market place that will offer a institutional grade custody program combined with a fully regulated digital asset exchange and physically delivered futures on Bitcoin . Understanding their partnerships with Starbucks , Microsoft as well as their relationship with I.C.E ( Intercontinental Exchange ) which operates traditional exchanges like the NYSE is a news worthy event to follow in the coming months. In the past two weeks they have closed initial funding rounds and have raised over $180M. This week they are on a hiring spree for core developers. Follow their twitter for the latest updates.
#2 - Jack Dorsey - CEO of Twitter - was recently on the Joe Rogan podcast promoting Bitcoin and digital assets as a revolutionary technology. He believes Bitcoin will become the world currency in our lifetimes as it was born on the internet and will become the currency of choice of the internet. Square continues to outperform on the stock market and allows for bitcoin payments to be sent and received via their app as well as fiat.
#3 - Dan Morehead - CEO of Pantera Digital has said recently despite the market sentiment in prices the fundamentals in the ecosystem have never been stronger. He believes all the innovation and infrastructure that is being built to accommodate institutional investments has calmed any doubts whether blockchain technology and Bitcoin is here to stay or not.
Despite the positive fundamentals what does the technical picture tell us?
BEARS - Back on April 10th, 2018 bears successfully completed the death cross where the 50 Day SMA (Orange Trend Line) fell below the 200 Day MA (Blue Trend Line). Since then Ethereum bulls have exhibited typical bear market behavior. Desperate volatile pullbacks, but inside a descending channel. Selling pressure continues. If bears are successful in pushing prices below $95 a likely retest of the December lows of $80 is very likely. We also feel that a double bounce is unlikely at this level and that a break below $80 could ensue panic selling. There is little historical support from 2017 at these lower levels as Ethereum ballooned up from $13, but we feel a more probable support would be a drop to the 161.8% Fibonacci retracement to around $31.88. We feel there is enough of a risk/reward ratio to place a short entry if the bears are able to break below our short entry price of $95.
BULLS - Bullish signs will not be evident until there is a high volume event that breaks above the 50 Day SMA, which is sitting at $123 at time of writing. Therefore, we are suggesting traders to wait until the bulls breaks above the descending channel at or around $127 at the time of writing. We will update this entry price as the market develops and possibly to lower levels. The 200 Daily MA (Blue Trend Line ) is sitting around $205. Any asset class that breaks above its 200 Day MA is a very positive price action that should lead to a long term positive sentiment and bullish trend direction. Until Ethereum breaks above and confirms this trend line as support we will maintain an overall bearish sentiment.
Bullish Chart Pattern: A falling wedge pattern has been developing on the Ethereum chart since September 2018 and has been confirmed by multiple touches on the high and low. The falling wedge is marked by lower highs, however, the lower lows is decreasing in magnitude which signals the bears are starting to lose their grip on the market. This is normally traded as a reversal pattern at the bottom of a downtrend.
RSI - There is a positive divergence on the RSI daily timeframe but this doesn't hold much weight. RSI confirms bearish momentum as it is well below 60.
Trade suggestion: We are not recommending any trades until there is more market clarity whether you are a bear or bull.
Regards,
Bobby
Today marks the launch of my 21 week trading program where I will be publishing text and video content M-F. I will be updating this report Wednesday and Friday this week so be sure to hit the like and follow to get notified.
Week in Crypto (Top 3 Events):
#1 - Baakt continues to make headlines and progress in launching their proprietary digital asset market place that will offer a institutional grade custody program combined with a fully regulated digital asset exchange and physically delivered futures on Bitcoin . Understanding their partnerships with Starbucks , Microsoft as well as their relationship with I.C.E ( Intercontinental Exchange ) which operates traditional exchanges like the NYSE is a news worthy event to follow in the coming months. In the past two weeks they have closed initial funding rounds and have raised over $180M. This week they are on a hiring spree for core developers. Follow their twitter for the latest updates.
#2 - Jack Dorsey - CEO of Twitter - was recently on the Joe Rogan podcast promoting Bitcoin and digital assets as a revolutionary technology. He believes Bitcoin will become the world currency in our lifetimes as it was born on the internet and will become the currency of choice of the internet. Square continues to outperform on the stock market and allows for bitcoin payments to be sent and received via their app as well as fiat.
#3 - Dan Morehead - CEO of Pantera Digital has said recently despite the market sentiment in prices the fundamentals in the ecosystem have never been stronger. He believes all the innovation and infrastructure that is being built to accommodate institutional investments has calmed any doubts whether blockchain technology and Bitcoin is here to stay or not.
Despite the positive fundamentals what does the technical picture tell us?
BEARS - Back on April 10th, 2018 bears successfully completed the death cross where the 50 Day SMA (Orange Trend Line) fell below the 200 Day MA (Blue Trend Line). Since then Ethereum bulls have exhibited typical bear market behavior. Desperate volatile pullbacks, but inside a descending channel. Selling pressure continues. If bears are successful in pushing prices below $95 a likely retest of the December lows of $80 is very likely. We also feel that a double bounce is unlikely at this level and that a break below $80 could ensue panic selling. There is little historical support from 2017 at these lower levels as Ethereum ballooned up from $13, but we feel a more probable support would be a drop to the 161.8% Fibonacci retracement to around $31.88. We feel there is enough of a risk/reward ratio to place a short entry if the bears are able to break below our short entry price of $95.
BULLS - Bullish signs will not be evident until there is a high volume event that breaks above the 50 Day SMA, which is sitting at $123 at time of writing. Therefore, we are suggesting traders to wait until the bulls breaks above the descending channel at or around $127 at the time of writing. We will update this entry price as the market develops and possibly to lower levels. The 200 Daily MA (Blue Trend Line ) is sitting around $205. Any asset class that breaks above its 200 Day MA is a very positive price action that should lead to a long term positive sentiment and bullish trend direction. Until Ethereum breaks above and confirms this trend line as support we will maintain an overall bearish sentiment.
Bullish Chart Pattern: A falling wedge pattern has been developing on the Ethereum chart since September 2018 and has been confirmed by multiple touches on the high and low. The falling wedge is marked by lower highs, however, the lower lows is decreasing in magnitude which signals the bears are starting to lose their grip on the market. This is normally traded as a reversal pattern at the bottom of a downtrend.
RSI - There is a positive divergence on the RSI daily timeframe but this doesn't hold much weight. RSI confirms bearish momentum as it is well below 60.
Trade suggestion: We are not recommending any trades until there is more market clarity whether you are a bear or bull.
Regards,
Bobby
Today marks the launch of my 21 week trading program where I will be publishing text and video content M-F. I will be updating this report Wednesday and Friday this week so be sure to hit the like and follow to get notified.
Comment:
I have a bearish bias on Ethereum. Stochastic is rolling over to negative territory. RSI is pointing down again as well as the 20 Day EMA (Pink TL). If bears successfully smash through $95 this is where I see price action headed. Of course this depends on Bitcoin so please watch my latest VIDEO on BTC market update.
