ETHUSD Perspective And Levels: Tight Range Low Volume. Zzzzz.

27. Juli 2017

ETHUSD Update: New range bound condition established between 190 support and 205 resistance on declining average volume. With August 1st around the corner, I don't expect much follow through from this market.

The 205 resistance which I mentioned in yesterday's report continues to hold, (.382) of previous bear swing. A break higher would indicate that the bearish momentum that took the market to this area has been absorbed. As long as this level holds, price is likely to decline into the 183 to 163 support zone. There is a triple bottom that has formed under declining volume (see chart) which makes this bullish reversal formation less reliable.

Range bound markets express equilibrium. It means both buyers and sellers are in agreement. A trending market is where there is an imbalance and one group dominates over the other. On the bigger picture, the buyers are still in control, since the 190 low is much higher than the 136 recent low. Higher lows typically lead to higher highs. Since this market depends on the outcome of 8/1, we must be prepared for anything, because events like this cannot be anticipated from a technical point of view.

The other factor that we are contending with is volume. Low volume makes price patterns, break outs and other signals much less reliable. These conditions are known for a much higher degree of randomness, and from my experience, are best to avoid. Keep in mind when your broker sends you an email explaining that your withdrawals are going to be halted, and that you need to put your request in by 7/31, that is going to create fear (especially when you follow their instructions, and they still delay your withdrawal). And you get this email after reading about one ICO scam after another. Not good for facilitating volume in a market.

I am still interested in buying into this market for a swing trade, and if I get my price validation within the price zone that my trading plan calls for, I am willing to take risk even before 8/1. I will just have to start smaller, and use a much wider stop than usual.

If for some reason price breaks out to the upside before 8/1, there are quite a few resistance levels to contend with like the 212 (former support), and the 230 area. I would be surprised if price can make this progress before Tuesday and expect it to continue to stay range bound or find a new range at lower prices.

In summary, 190 to 205 is the current range within a declining volume environment. Price patterns and signals are going to be less reliable, but I am prepared to get back in within the 183 to 163 support zone if the market shows me a reversal pattern. Risk is higher and must be adjusted for especially before 8/1. Otherwise I will stay flat and continue to watch.

Also I have a question to all my readers: What other markets would you like to see an evaluation on? I write about ETH because it seems this is what the community gets the most out of, but I follow many other markets as well.