ETHUSD Order Flow - The Script Spots Sellers Drying Up

Hey traders,

One wonders. Is there a case to be made to be long ETHUSD?

Well, if we narrow it down to fractal-based order flow analysis, there are definitely tentative signs that sellers are just simply unable to make further progress to the downside.

Again, I won’t defend this point with any subjective opinion. Instead, I will let you see the ETHUSD chart, with the OFA script attached to it, to show you what’s the current state of affairs.

What do you notice in this daily chart? Every time there is a new bearish cycle, this one fails to amplify the move in equal or greater magnitude than the preceding cycle.

When that occurs, we want to stay on the lookout as this is by no means a sign that validates aping in, but rather it is an early sign that the tide might be turning.

We start getting more validation should the structure start shifting by breaking the previously identified peak in the OFA script , which happens to be > 1.875k

If that break materialises with price acceptance beyond, then we may really be onto something.

Remember the two key main features of the OFA script :

Magnitude: A major clue that will help determine the health of a trend is the type of progress by the dominant side in control of the trend. We need to ask the following question: Are the new legs in the active buy-sell side campaign as identified by the script increasing or decreasing in magnitude?

Velocity: When it comes to the distance the price moves, the magnitude is only ½ the equation. The other ½ has to do with the velocity of the move or the speed. Was the new leg created after a fast and impulsive move? Or did price make a new low or high with the movement being sluggish, compressive and taking too long to form? A good rule of thumb is to count the number of candles it took to achieve a new leg.

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Comment:

The market is approaching the breakout point which is likely to lead to a fresh buy-side campaign with the potential to last weeks.