Hi friends! Welcome to this update analysis on Ethereum! Looking at the four hour chart, we can see that ETH has fallen from the bear flag, and formed a small new downtrend channel (blue dots.) It's currently pushing into the 200 EMA, as the sell-side momentum continues to pick up. Taking a closer look inside of this new channel, we can see that there was a decent amount of action around the 50 EMA (in orange,) which produced two failed attempts break above. Ethereum wants to go somewhere, and clearly, up is not the direction that it wants to go. It appears to be building a small bear flag on top of the 200 EMA, which increases the likelihood that it will break. If you look closely, you can see a head and shoulders formation inside of the bear flag and the channel. I didn't want to draw it on the chart, because there would be too many things in one area. However, it is there. I've taken the liberty to draw a pink downtrend channel, just to highlight the potential downside. I'm not saying it will happen, but another test of the bottom of this falling pink channel, will put Eeth well under $600. I'm not saying that WILL happen — I'm just illustrating how, and why, it is definitely possible.
To recap the recent action, we can see that a large head and shoulders formation was made at the all time high. That head and shoulders immediately collapsed, dropping below the rising parallel channel (in green,) and producing a bearish pennant flag. From there, the bear flag broke down, and has produced another head and shoulders pattern. Also, the MACD is expanding to the downside, after a recent bearish crossover (red circle.) Additionally, every attempt to get above the 50 EMA, since the all time high, has been a failure. Overhead resistance is substantial, while downside support is minimal. Therefore, the path of least resistance, is still down. Let me be real with you now. If the bulls can't get Eeth back above the falling pink channel, it's game over — lights out — hasta la vista — sayonara! You get the picture. =D
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
Here's a question for you, MPC. I get everything you're saying and have been following along, but doesn't it feel real obvious? Where's the whale trick? That's what scares me, not having some clearer ideas for how the whales are going to outsmart us all.
For example, in the last big correction in September, after BTC/Eth/Ltc corrected 40-70%, they bounced up and ALL the TA pointed to a second drop of some kind, but it never happened. The whales swallowed up all the shorts, things stayed flat and the bears got killed.
If it's so clear things are going down, what could the whales be planning? I see only two options at the moment:
1. Cut this second decline short before all the TA predicting $600 Eth and 8k BTC. Just when things are looking like we're about to get there, the whales will set a bottom HARD and that will be that. That's basically how the July Eth correction ended. Everyone was excited to go short from 150 to 100 and WHAM a huge buy kicked in at 130 and a few hours later Eth was at $180 and hasn't been below since.
2. Pushing things much lower than all the TA is predicting, lets say Eth to $420, BTC to 5k, and LTC to $70.
The way I see it, scenario 2 sucks but all you're doing is missing out on coins you COULD have bought. Meanwhile scenario 1 sucks way harder because if you're short when the bounce comes in...you're coins aren't coming back.
What do you think? I just think the whales read the TA also and plan around it.
Too easy, too obvious, too many people talking about buying the dip on Friday, standing on the start line with fiat ready...
Case 1 - likely to happen, I wouldn't worry about it tho, the market is always there
Case 2 - that could be a real nasty one if played the sneaky way - throwing a 10-15% 'breakout' for the bulls and then hit hard pushing it down to $500 and below. Blood on the streets.
And if You allow me:
Case 3 - few are expecting the same unashamed trick to be pulled in the exact same way again like we saw it a week earlier. Simple things tend to work ;)
Case 4 - my favorite: we are so narrowed down to BTC futures and ETH following the same pattern that we will miss the real show somewhere else.
One thing I'll grant You - who makes the winning guess for the next 5-10 days, will walk away with a decent increase in his trading balance.
Cheers & good hunting!
Vanwes1
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Rexitup, it's called CME futures. Look it up. This will correct on Friday after the contracts close. Good luck. None of this requires technical analysis. It requires an ear to Wall Street. This analysis is amazing because it gives u an idea of how low this can go. U can't time the bottom in terms of price but I bet you can get ETH under 800 dollars before it corrects.
s3_00
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@Vanwes1, am I missing something? I didn't know ltc and eth futures were being traded? If that's true how does BTC futures effect LTC and ETH
arvo
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@s3_00, if you haven't noticed, virtually the entire market lives and dies with btc right now...
tvbman17
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@arvo, Agreed. All charts for coins I am tracking have the exact same shape except for small slight variations. Their technical indicators, however, are all different.
s3_00
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@arvo, yea yea yea I see the charts. My question was worded poorly. I thought maybe I missed that ETH and ltc futures existed. I do have another question to scoff at, but given my igmorance on the matter I have to ask in order to get on with it. How does the end of a futures contract effect the market?
arvo
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@s3_00, i think we'll have to wait for someone smarter to answer that. i'm not well-versed on futures, but im pretty sure wallstreet will manipulate our prices to make sure they make the most money.
Vanwes1
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@s3_00, the big three which are LTC, ETH, and BTC tend to move together. Especially LTC and BTC. It's been that way since the runnup on in mid December. Wall Street believes in these three and has bought them up accordingly. Look at the percentage gains and losses on the daily with BTC and LTC. They mirror each other. Just my opinion.
For example, in the last big correction in September, after BTC/Eth/Ltc corrected 40-70%, they bounced up and ALL the TA pointed to a second drop of some kind, but it never happened. The whales swallowed up all the shorts, things stayed flat and the bears got killed.
If it's so clear things are going down, what could the whales be planning? I see only two options at the moment:
1. Cut this second decline short before all the TA predicting $600 Eth and 8k BTC. Just when things are looking like we're about to get there, the whales will set a bottom HARD and that will be that. That's basically how the July Eth correction ended. Everyone was excited to go short from 150 to 100 and WHAM a huge buy kicked in at 130 and a few hours later Eth was at $180 and hasn't been below since.
2. Pushing things much lower than all the TA is predicting, lets say Eth to $420, BTC to 5k, and LTC to $70.
The way I see it, scenario 2 sucks but all you're doing is missing out on coins you COULD have bought. Meanwhile scenario 1 sucks way harder because if you're short when the bounce comes in...you're coins aren't coming back.
What do you think? I just think the whales read the TA also and plan around it.