ETH Breakdown - State of the Chart
I'm taking a look at ETH right now, and want to share some new thoughts since we find ourselves now on the Top of this channel formed in early Q1. If we can breakout of 3100, I think we are destined for 3700, 4000. I provided Volume by Price on the left of this chart, so you can see where ETH has been traded, the most on the way down since November. If you look in the Green Box and go to the left of the chart, you will find a large, thinly traded area in the chart. ETH should move rather quickly thru this area as there are less bag holders looking to sell to breakeven from buying on the way down. The gap from 3250 to 3700 is pretty thin. Breaking out of 3100 though will be a significant challenge though, as a clear wedge has formed and is starting to narrow and squeeze ETH on direction or another. I'll address the two sides of how I read situations like this below so you can hopefully be prepared as ETH meets a very critical point in its journey for what Q2 could look like.
Resistance side of channel
We've traded in a long term bearish cycle since November, and a more recent channel since early January. The most recent channel, the January channel, was formed after ETH took a nose dive and bounced hard at a Support line that came from a channel formed 18 months ago that we've been trading in since November 2020. While we needed that bounce, it wasn't enough. Since we've bounced of that support line, we've also found this newly formed channel, which we have now bounced of the ceiling of it on 4 separate occasions. (Thich Red Line on chart). Its clear that the ceiling of this channel has proven tough to break out of, and with the current uncertainty in the market, it may provide to be too tough for us to truly break free. That would have to mean though, that our support side of the channel breaks down.
Support side of channel Its not all bearish on this side. Our Support line in this 3 month channel is the same support line that extends all the way back to November 2020. Its been tested, and it hasn't broke down. While we are in a 5 month bear channel, we are in an 18 month bull channel. Going full nerd, I like to think of each channel as a wave, the older the channel, the larger the wave. Some channels are intra-day, and might last 15 minutes.. pretty small wave in the grand scheme of how ETH moves. When faced up against a larger wave, the larger wave will normally win. however, that wave will now be less large, as its taken on impact from a smaller wave heading in a different direction. In the case of our current ETH situation, we have an 18 month wave that's held the test of time, but its taken some hits, and the waves in front of it have all been knocked out!!!!
Summary So here we are, in a wedge, with not really any short term support to the downside of the channel, other than small waves made in the last 2 days. We rely on our large wave supporting us around 2400 as we wedge closer, with a couple decent sized waves, and an uncertain future looking to take it on. I have no fk'ing clue which will win :). But I do know, we need to watch for breaks of our support lines, and be ready to react, because we could move quickly on a breakout upwards, and quickly on a breakout to the downside. I'm honing the positive energy tonight, so no downside technical for you.
ETHUSD
Resistance side of channel
We've traded in a long term bearish cycle since November, and a more recent channel since early January. The most recent channel, the January channel, was formed after ETH took a nose dive and bounced hard at a Support line that came from a channel formed 18 months ago that we've been trading in since November 2020. While we needed that bounce, it wasn't enough. Since we've bounced of that support line, we've also found this newly formed channel, which we have now bounced of the ceiling of it on 4 separate occasions. (Thich Red Line on chart). Its clear that the ceiling of this channel has proven tough to break out of, and with the current uncertainty in the market, it may provide to be too tough for us to truly break free. That would have to mean though, that our support side of the channel breaks down.
Support side of channel Its not all bearish on this side. Our Support line in this 3 month channel is the same support line that extends all the way back to November 2020. Its been tested, and it hasn't broke down. While we are in a 5 month bear channel, we are in an 18 month bull channel. Going full nerd, I like to think of each channel as a wave, the older the channel, the larger the wave. Some channels are intra-day, and might last 15 minutes.. pretty small wave in the grand scheme of how ETH moves. When faced up against a larger wave, the larger wave will normally win. however, that wave will now be less large, as its taken on impact from a smaller wave heading in a different direction. In the case of our current ETH situation, we have an 18 month wave that's held the test of time, but its taken some hits, and the waves in front of it have all been knocked out!!!!
Summary So here we are, in a wedge, with not really any short term support to the downside of the channel, other than small waves made in the last 2 days. We rely on our large wave supporting us around 2400 as we wedge closer, with a couple decent sized waves, and an uncertain future looking to take it on. I have no fk'ing clue which will win :). But I do know, we need to watch for breaks of our support lines, and be ready to react, because we could move quickly on a breakout upwards, and quickly on a breakout to the downside. I'm honing the positive energy tonight, so no downside technical for you.
ETHUSD
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