ETHUSD Update: This market is still gyrating within the previously identified triangle with the only new information being the minor higher low established at 219. I am long at 228.61 with only 10% of my usual size.
Consolidations require a ton of patience and taking a position at the mid point of a consolidation is usually not the most opportune price, but I am making an exception here. The most recent price structure presents a minor higher low which is a sign of strength, and is usually followed by a higher high which should take this market into the next minor resistance zone of 230 to 242 (see previous reports linked to this evaluation). To compensate for the additional risk of buying in the middle of a triangle, I have taken a small position of 10% of my usual unit size. Great thing about these markets is the size is defined by you, not the exchange and this allows for more efficient risk management.
Even though there is a resistance zone just above my buy price, I expect it to be compromised because in strong markets resistances are more likely to break while supports tend to hold. I intend to add to my position IF price breaks 241, and again will only add another %15 to total 25% of my normal position size. Another price I will add is IF price retraces to 224, which is a .618 of the current minor upswing.
Since my size is small, I can afford wider stops and my first point of reference based on the new market structure is 207 so that is where I am out if this market falls apart. I intend to build a position for a swing trade, and I am expecting a move into the 250 to 280 resistance within the coming week so for that reason I am placing a target at 285 for now. Why 285? Because it offers slightly more than 2:1 RR, which is an acceptable starting point. I believe by the time this market gets near 285, I will have plenty of opportunity to adjust higher if necessary.
In summary, higher lows offer attractive buying opportunities because not only do they signal oncoming strength, but they offer a clear reference point to define risk. I have started a swing trade long with a fraction of my usual size to compensate for the additional risk taken this these levels.
I would like to see ETH catch the uptrends vigorously. But despite ETH's technically being the more potent of the two currencies, it is BTC which is seizing the main focus and attention of crowds due to Segwitx2 & Aug 1sth upcoming drama, thus we are going to see more life and predictability in BTC market and charts in comparison to ETH market. So ETH does not receive as much positive attention as it is capacitated for, and for short term, I emphasize on short term, BTC remains the main player of the scene while ETH intrinsically cannot contribute much to the cryptocurrency total cap recovery.
Generally you see which ever seizes the publicity of the headlines wins the capital and somehow sometimes it is the controversy which decides where the gain is going to be not the actual technical definitions and potential.
Is this psychological interpretation of the two interconnected and competing markets valid in your expertly view? And if yes, is there a way of incorporating it into the charts and so schedule timing of investing on the two to max the profit? Maybe that is what expert traders do instinctively.
On this I, as an enthusiast, humbly seek consultation from you and other PRO members who, not like me, are experts.
MarcPMarkets
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@Farrokh.ansari.1977, thank you for sharing your insight. I like to think of BTC like the world reserve currency since all the alt coins use it as a base to trade against. As far as headlines winning capital? I believe the headlines are a reaction to the market, not the other way around. When BTC was 250 after declining from 1000, the headlines were saying that it was a failed experiment. Some how capital continued to support it, and now it's flirting with 3k. Headlines are actually a very good contrarian indicator if you look at historical research. Since ETH behaves like a derivative of BTC, the two markets behave in a similar fashion on price charts. Just that BTC is a higher price and larger capitalization. If you look at both markets on 4 hour or higher time frames, they both made the same type of move recently and are both in similar consolidations at the moment. ETH is just a cheaper and lower beta way to participate in the BTC momentum. When BTC breaks out, I expect ETH to do the same.
farrokh.ansari.1977
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@MarcPMarkets,Yes. I agree with you. ETH and other altcoins have flourished under the umbrella of Bitcoin with which I, and perhaps many of us, developed our first cryptocurrency love affairs watching it conquer the 1000$ summit then. As dear as Bitcoin is in the crypto-world, with longest history of all, any challenge to it’s throne might redefine both the future of cryptocurrencies and the future of our all investments.
The big thing is to forecast who’s the King in 2-3 years from now when hopefully crypto will be revolutionizing the world. BTC? ETH?…
If something is able to take on Bitcoin, It has got to be such ground shaking technology, the next huge thing.
This as my big question must draw our scrutinizing attention to the character and fate of ETH as Bitcoins fundamental challenger for now, and how it plays into the market.
I fear AI’s first and long foreboded challenge to humanity might be on some unstoppably programmable platform like ETH. They’re already developing concepts of crypto AI !! How Bitcoin is going to stand up to that?
MarcPMarkets
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@Farrokh.ansari.1977, forecasting which currency comes out on top is definitely a more fundamental argument and beyond the scope of my analysis. As a price action trader, I am concerned with what happens in an hour from now, tomorrow or maybe in a few weeks. 2 to 3 years? With the way technology is moving, anything can happen. It will be interesting to see how these technologies evolve and what comes up to challenge them.
farrokh.ansari.1977
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@MarcPMarkets, I am no professional trader. I share my view to gather insight. I thank you for your unemotional, vivid and educating analyses posted here and I hope they get the deserved attention. My favorite.
I would like to see ETH catch the uptrends vigorously. But despite ETH's technically being the more potent of the two currencies, it is BTC which is seizing the main focus and attention of crowds due to Segwitx2 & Aug 1sth upcoming drama, thus we are going to see more life and predictability in BTC market and charts in comparison to ETH market. So ETH does not receive as much positive attention as it is capacitated for, and for short term, I emphasize on short term, BTC remains the main player of the scene while ETH intrinsically cannot contribute much to the cryptocurrency total cap recovery.
Generally you see which ever seizes the publicity of the headlines wins the capital and somehow sometimes it is the controversy which decides where the gain is going to be not the actual technical definitions and potential.
Is this psychological interpretation of the two interconnected and competing markets valid in your expertly view? And if yes, is there a way of incorporating it into the charts and so schedule timing of investing on the two to max the profit? Maybe that is what expert traders do instinctively.
On this I, as an enthusiast, humbly seek consultation from you and other PRO members who, not like me, are experts.