Ethereum ETH/USD Technical Analysis | March 11th 2018

“Ask me if I’m tryna kick knowledge?

Nah, I’m tryna kick the s** you need to learn though

That ether, that s*** that make your soul burn slow”

Nas – Ether


When it comes to technical trading, knowledge of your market is absolutely invaluable, but it can only take you so far.

One can memorize innumerable chart patterns, harmonics and price action candlesticks from historical charts, but if you are unable to apply these in real time to a market then you will not get far.

One needs to watch the graphs of your chosen markets, learning through experience the way that they move and respond to chart resistance and support.

Ethereum is no exception to this golden rule. Like other cryptocurrencies, its price is strongly affected by news, rumors and FUD. It is the platform where the majority of ICOs are held, so is also heavily influenced by the volume of ICOs taking place. However, as mentioned in my previous article, I believe that technical charts are the purest amalgamation of all available information.

Lets apply some trend lines and Fibonacci retracements to this cryptocurrency and see if we can make some assessments about its future. As always, I would advocate patience, logical reasoning, and a completely impartial attitude in terms of emotion when trading such violent markets. Otherwise we lower ourselves to the state of gamblers and speculators, helpless in this shifting environment.

Speaking of the infamous diethyl ether, the wonderful eccentric that was Hunter S Thompson stated:

“The only thing that really worried me was the ether. There is nothing in the world more helpless and irresponsible and depraved than a man in the depths of an ether binge.”

We are not going to worry about Ethereum. Our technical analysis and calm temperament will ensure that we are not helpless and irresponsible in our decisions.

DAILY:

Here we can see ETH’s initial rise back in June 2016 to the $400 level, and then its steady decline before the huge push to just past the $1415 level. We can draw some well fitting Fibonacci levels between recent highs and lows, and can see that ETH’s decline has respected these levels, and is now teetering on the 62% level for the second time (following the kiss in early Feb).

When we look closer at this market, we can also draw an ascending trend line and see the small pin bar formation that resulted when price touched this line and the 62% Fibonacci level. This indicates buying pressure at this level, but is not enough to jump heedlessly into the market without a closer look.

4H:

Look at that beautiful kiss. We can draw Fibonacci levels between the recent relief rally upwards and see how the market rose rapidly and then has slowly descended downwards, continuing relatively uninterrupted until the last chance level of 78% where we have seen a nice little bounce. Remember this is a third touch on an upward trend line and is likely to give a decent move, let’s go in further still to assess at the 1H level.

1H:

This is as far as I usually go when making an analysis. Anything closer tends to be corrupted by market ‘noise’ and is not reliable as a medium of technical trading.

This chart shows the bounce in exquisite detail, and the corresponding decline, again to a Fib 78% level. This market really doesn’t want to give anything away, does it? This is a crucial point for ETH and will dictate the market’s direction for a while to come.

Conclusion


If the market can break above the previous resistance at $740, and then the higher descending trend line (just seen at the top of the above graph), then we may see a bullish phase for ETH. However, currently the momentum does look bearing still, and if the market cannot build some bullish momentum, the weight of the bears will drive it lower. No trades until either line has been broken. Don’t binge on ether, monitor closely and see where it goes from here.

On a side note, Nas’ “Ether” is a response diss track to Jay Z, widely considered to be one of the most ruthless and classic diss tracks in Hip Hop History. Despite this, Nas never achieved the same level of fame and fortune as Jay Z. Does this relationship remind you of two major cryptocurrencies? Or am I just fishing for correlations between the song and the charts?

I’m not even sure myself.

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