Primary Chart: 2D Chart of ETH Showing Fibonacci Targets
ETH and most cryptos are moving fast so this post will be brief. But ETH is headed to new lows. It has sliced through every single major retracement of the rally off the June 18, 2022 low.
Squish has remained bearish on BTC and other cryptos despite very brief counter-trend forecasts on occasion to take into account the strength from bear rallies.
ETH is plummeting along with the rest of the crypto market due to a well-publicized liquidity crisis that has seen SBF's net worth fall over 95%.
Further, crypto market cap just broke below a long-term logarithmic TL. That strengthens the bearish outlook for the entire crypto space given the nature of the break.
Supplementary Chart: Total Crypto Market Cap with Long-Term TL
Squish's first price target is the YTD low around $880. The second price target is $569, which is still conservative. Yes, that sounds extreme, but for those who lost 80% from buying at the peak, consider that buying at $1000 can quickly lead to a -50% to -60% loss. Caution is warranted for anything other than well-managed, disciplined trades for counter-trend bounces, which are actually low probability as @scheplick discussed today in a livestream (highly recommend his livestream events in the future).
The most aggressive downside target target is $367, which should not be considered unless and until price falls below $569 decisively. This is the measured-move area as well as a Fibonacci 1.00 projection of the first major segment of the decline projected from the peak of the summer's rally.
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Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.
Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders.
DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
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The shallowest retracement level of .236 for ETH's entire move (based on available BITSTAMP data) would involve a drawdown to $535.
The next retracement, a .382 retracement which is also considered a relatively shallow retracement of a move, would put ETH at $136.
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ETH has reclaimed the downside breakout point which is short-term bullish. ETH still may likely find its way to $569, but it won't be in a straight line. For the time being, this forecast is in doubt until ETH breaks back below 1155.
As several famous traders and fund managers have said, it's okay to be wrong, but it's not okay to stay wrong. Until ETH reclaims the breakout to the downside, this forecast will be placed on hold.
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As mentioned in the last update on Nov. 10 (during the massive squeeze across equities and cryptos), this forecast is placed on hold until ETH reclaims the breakout level to the downside around (Breaking back below the $1100-$1200 zone).
Interestingly, although a failed breakdown is short-term bullish, a failed breakout is short-term bearish. And ETH's 2-hour chart shows a major failed breakout to the upside followed by this weeks failed breakdown to the downside. This leaves price inside the chop range again from the past couple months of $1200-$1500, and it leaves price in a sort of equilibrium b/w buyers and sellers, with no clear winner yet, and no clear trend direction until a successful breakout / breakdown.
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ETH has been looking weak since it whipsawed back above the breakout level. It's hovering right at the $1200 level as shown below. The fact that it's spending a lot of time here at the $1200 level without reacting higher suggests significant weakness.
On Nov. 10, the forecast for new lows was placed on hold. The forecast remains on hold until such time as a break back below the breakout zone—$1150-$1200.
In the meantime, ETH continues to chop sideways in corrective, consolidative price action.
I can't wait to see Ethereum at $569. I love sale shopping!:)) I started following you recently and discovered you cover all the items I trade in your analyses. Thank you for all your work.
SquishTrade
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@eminalopalop, Thanks! I'm not sure my timing was right here. We'll have to see what happens after this little rally in equities and risk assets is finished. ETH reclaimed the downside breakout, and for more downside, it needs to break back below it. As always, thanks for your comment and support!
kcj9x2kyt5
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Nothing in the chart suggests your target price of 569…
SquishTrade
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@kcj9x2kyt5, I'm sorry, I guess my PT was too high at $569? Should it have been the next one down at $367? The 367 target does look better after all.
All jokes aside, the Fibonacci projection is right at $569—how could you miss it? Did you need a flashing red light attached to it? TradingView doesn't have blinking lights to attach to items on a chart, please let me know when that rolls out, I'll be sure to add for people who struggle to see important features on a chart. Sorry you're having a tough year with your buy-and-hold crypto positions -- seriously, I am.
Tolberti
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It was a false breakout, that's true. Thanks for this detailed analysis.
AtlasTrades
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Your ethusdt idea seems to be pretty accurate, I also have the same view, thank you.
KlejdiCuni
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Considering the market conditions your forecast should work very well. Great job
SwallowPremium
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Been waiting for that scenario to happen for quite some time now.
SquishTrade
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@SwallowPremium, what are your thoughts? When do you think the final leg lower will occur? It sure looked like it was underway yesterday with liquidity issues at FTX. But now it seems that crypto is stabilizing and ETH may be reclaiming the breakout, putting the leg lower on hold for now . . . we'll see what happens over the next few weeks.