ETHUSD: Bearish Trigger Near But Higher Low Likely To Form.

ETHUSD update: Inside bar has materialized which sets the stage for the next move in this market. With the bearish structure still intact, an attempt toward the 392 reversal zone boundary is likely. The structure to watch for though is a higher low formation between current prices and 392. This would be the bullish confirmation that a broader movement toward higher prices is in progress.

I wrote in my previous reports that the recent short squeeze in these markets could be the beginning of a broader move higher. The general price area of these markets, especially BTC, present reward/risk scenarios that are skewed toward the bullish side.

And part of the motivation that can help these markets along can come from a weakening Dollar. I published an article earlier on S.C. that explored this relationship further.

At this point, ETH as well as BTC are facing the first bearish obstacle. The mid 440's is where the bearish trend line is located as well as the lower boundary of the broad 544 to 464 support zone (.618 area of recent bullish structure). If price breaks back below the low 440s, it will be generating a sell trigger and can lead to a retest of the 400 low.

If 400 is taken out, 392 is the next reversal zone boundary relative to the 404 low. That is the location to look for reversal candles like a bullish pin bar.

A close below 392 opens the possibility for the test of 374 which would be a bearish sign to say the least. As S.C., we are anticipating the higher low scenario because of the magnitude of the initial spike on Friday.

In summary, if the higher low can materialize, it would justify a swing trade long idea (which will be shared with followers on S.C. if we take it). A push off a higher low can take price back into the low 500's at least.

If price action stays tight, it can also form a shallow higher low and squeeze earlier than expected. This would be a higher risk trade because of the general lack of follow through and bearish obstacles still in play. In this scenario, we will wait it out until the trend line is at least cleared before considering such aggressive setups.

You will be in the game longer if your biggest mistakes are missing trades, rather than forcing trades. Missing a trade does not drain your capital, while forced trades drain it quickly. Just something to think about.