Skip to content Skip to sidebar Skip to footer

Ethereum (ETH) plunged deep in the red last week as the market took a turn for the downside. We saw it break below the key 61.8% fib extension level at $144. The price is currently trading above that level and is eyeing further upside. It would not be surprising to see ETH/USD trading above $163 in the weeks ahead. This short term bullishness must however not be mistaken with the end of this correction that started when ETH/USD entered a bear trend in July this year. Ethereum (ETH) like the rest of the market has been in a bear market since the beginning of 2018. We saw a bullish period in between but the second half of the bear market has yet to come to completion. 

RSI on the 4H chart for ETH/USD shows that the price is now in a good position to continue to trade higher for a while. The vast majority of retail traders is extremely fearful and expects further downside. There is also a strong probability that we might see a move towards the 200 EMA on the 4H time frame. A fake out past the descending channel can also not be ruled out at this point. The market makers and whales could play all sorts of games short term to convince traders that this is the end of the correction and we are headed towards a new yearly high. While I do think a short term relief rally is long overdue, I remain bearish long term on the market and I expect ETH/USD to plunge well below $80 at the end of this phase of the bear market.

The 4H chart for Ethereum dominance (ETH.D) presents a very clear picture of what to expect. If we see a break and close above the 38.2% fib extension level, that would be a point where I would be short term bullish on Ethereum (ETH) and other altcoins. It is important to keep this simple. One thing I would like to add is that hodling can be extremely risky during a bear market. If you intend to trade any bullish moves at this time then it is important to practice effective risk management. 

There is an old saying in the market and that is, “the trend is your friend.” Rather than predicting or hoping or praying what will happen next, it is important to trade what is. The long term trend is bearish even though we could see short term bullishness. If you enter a trade, you must have a stop loss in place because this is not a time to be hodling as the correction is not over yet. If you buy the dip during a bull market, then you should be selling the top during a bear market. That is as simple as it gets and good traders keep trading as simple as possible.

Jefe Caan , 2019-11-26 00:00:00 ,

Source link

Leave a comment

NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

Source link