If you are still HODLing on to your cryptos, I can imagine that it has been a stressful, bumpy ride. However, there may be a little more of this bear cycle in the tank before we see any bullish action in the pipeline. Hang on in there as best you can.
This downward trend holds true for Ethereum, but there may still be some opportunities for money making, so let’s apply some technicals and see if we can discern some future movements.
1D:
I want to take a second look at ETH, and in the above Daily chart we can clearly see how it has broken through levels of support and come down to list around the $500 level (coincidentally the 62% Fibonacci retracement. The ultimate question at this point is simple. Is there more downside and will the Fed announcement tomorrow spur the fundamental traders into action? My advice is to patiently wait until at least Thursday, and then make our move. Jose Gonzales put it best:
“My moves are slow but soon they’ll know
Behind the scenes, they grow their schemes
Hiding intentions, revealing only fractions
Their moves are slow but soon you’ll know”
Slow Moves, José González
On the below daily chart, ETH has descended from its high in a relatively messy 2 step correction pattern. We fell to the $600 level in mid-February, and have now fallen even more, back to chart and full number support at the $500 level.
However, we can apply a different arrangement of the Fib levels, as can be seen in the below graph, and these indicate a potential low for ETH before the bullish streak that everyone is hoping for. I have moved the beginning point to the Mid-July 2017 level, and we can now see that the 78% Fib coincides with the chart support at $400 (Horizontal blue line below), touched back in mid-June and early September 2017:
Personally, this is my line in the sand. I think that the Fed will raise interest rates and this will strengthen the dollar, meaning further bearish movement for ETH, but all bulls should be watching that $400 level like a hawk. Me thinking anything doesn’t make it so, with the markets you should take a Socratic approach:
“I am the wisest man alive, for I know one thing, and that is that I know nothing.” – Socrates
Plan your slow moves behind the scenes, analyzing the technicals, and be ready for the reaction from this level when it comes.
Now, are there any short-term trades that could be made in the meantime? The beauty of spread betting is that one can make money in both directions! Let’s zoom into the 4H to get a closer look:
4H:
Here I have detailed the large decline, which, in my opinion, still has a little more room to fall. I have drawn a descending trend line that had a brief overshoot, and I still believe that this will have some relevance to come. There is confluence with the dotted horizontal line also, This is a previous low that has been broken, and now the market has come back to kiss it, if we see a bearish rejection on the 4H or 1H timeframes here, that is your indication to go short.
Below I have also drawn a Fib retracement from the most recent highs and lows, and you can use this to judge your entry if you decide to make a move.
I would place limit orders with the impending chaos that I believe will ensue tomorrow, as you can bet that the large financial institutions will be “Hiding intentions, revealing only fractions, Their moves are slow but soon you’ll know”
Conclusion:
Short term sell, let’s wait for the $400 level to be tested before even considering a long order.
For now, let’s see how the market reacts to the Fed announcements (I am not stating to trade the news, we should simply see if the news agrees with the technical analysis we have already drawn). In the meantime, download Jose’s Veneer, a masterpiece of songwriting and acoustic guitar, and let it calm you down as the carnage on Fed day rages around us.
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