ETHEREUM: Two Setups On The Horizon.

Feb 1

Switching it up to Ethereum today. There are two trade setups potentially setting up over the next two weeks. One is a short and one is a long and both depend on how price structure unfolds in light of the major catalysts on the horizon. The Clarity Act, NFP, unexpected tweets, geopolitical events, are just some of the items to keep an eye out for. From here it is all about adjusting to the new information as it is priced in.

After the "Powell Movement" we got some decisive moves. Bitcoin broken key levels, and is now trying to hold the 80K AREA. Bitcoin is the leader and IF the bearish momentum stays intact, 73K can be tested. Even in the face of this bearish move, I am not convinced this is a bear market. People lose sight of the fact the while short term perceptions may have changed, the current administration is STILL going to make attempts support this space. In light of that fact alone, generous pullbacks are best viewed as VERY attractive investment opportunities.

Ethereum is highly correlated to Bitcoin which means Bitcoin analysis can be used for planning and guidance when it comes to Ethereum just like S&P and NASDAQ. The scenarios on this chart MAY or MAY NOT play out, again the name of the game is adjusting to new information, waiting for confirmations, defining risk and then choosing to participate or NOT.

On this chart, since short term structure is now BEARISH, shorts are favored but not just from any level. WATCH for the bullish retrace back into the overhead resistance in between the 2,830 to 2900 region (KEY LEVEL). Confirmation there justifies a short with risk defined at the 3030 area (stop) and profit objective around the low 2100s. This swing trade setup can take a number of days to appear and potentially a week or so to play out.

The long idea requires the test and reversal confirmation at the 2100 support. This idea is aggressive since it will be again the short term momentum. IF there is a bullish catalyst over the coming weeks, and price confirms in this area, the reward/risk is very attractive here. It is also too early to lay out the specific trade idea itself, more structure needs to develop and reveal information (which I update regularly) but this should be enough to prepare yourself in terms of swing trade expectations. The profit objective for this potential play would be the key level as well.

Keep in mind, catalysts CHANGE perceptions of the future. A few months ago, Powell and the entire world of "experts" were saying we are going into EASY money land, and NOW he changes his mind. THIS changed the perception and fueled the bear argument. Over the next few weeks this perception can be further supported or negated by the information on the horizon, with the Clarity Act getting through the senate in particular. IF you are planning to take RISK, NOW is the time NOT when these markets LOOK "safe" again. Replace the Captain Obvious hat with the Contrarian hat.

Thank you for considering my analysis and perspective.

Feb 4

Note

Quick update: 2077 tested, major level for bullish reversals. Do not be mislead this is what buying opportunities appear like on the bigger picture. Risk is high for shorts at these levels, especially with Bitcoin probing 73K MAJOR support. Short term perception is bearish UNTIL bullish surprises appear out of now where. AMD + Warsh + Bad ADP + Oil spike along with rising bond yields (I talk about this problem regularly). While broader structure may change over next few weeks, probability of bullish retrace is high. Look for reversal on ETH and BTC confirmation at THESE levels. Also great for investment. Conservative profit objective for ETH is 2400 to 2500. Watch NFP Friday, CPI next week.