ETHUSD Update:Multiple day higher low forming in low volume environment as 8/1 gets nearer. As long as price stays below the 208 resistance, it is likely to gyrate within the 183 to 163 support zone.
Everyone is waiting for the outcome of 8/1 and the low volume serves as evidence. Nothing unusual about this especially in light of the constant ICO scams and questionable broker emails about halting trading and withdrawals. Most of this month has felt like a waiting game that will come to a conclusion on Tuesday.
Until then, it is reasonable to expect price to drift and I would like to see this market find stability within the 183 to 163 area which is relative to the .618 of the recent upswing. If price can present a reversal pattern on a smaller time frame, or a simple candle reversal on this time frame or above, it would solidify a broad higher low (see swing lines on chart) and provide an attractive reward to risk opportunity.
Keep in mind on 8/1 ANYTHING can happen and technical analysis can not help us anticipate wild random movements. With that being said if my setup appears before Tuesday, I will take a small position (5% of usual size) and not place a stop. Not using a stop is not something I would recommend, especially to new participants, and I am compensating for the additional risk with smaller size. If there is a wild move on Tuesday it may be in both directions and the majority of nearby stops will likely be taken out. If ETH goes to 0, can I handle the loss. If ETH has a wild gyration and finds stability, I will have a small position that I can build on, along with protecting myself with stop orders AFTER 8/1.
If price finds stability and does not go below 163, there will be a very bullish higher low in place, but in order to open the door to higher prices, the 208 (.382 of current bear swing) must be taken out. Beyond that, the 227 to 241 resistance zone is just below the .382 of the broader bearish swing and needs to also be taken out to continue the broader uptrend. If that scenario unfolds after 8/1, it is possible to see the 300s in a matter of days.
In terms of wave counts, this can be labeled as a Wave 2 of a broader 3. If that is the case, and price starts pushing the resistances mentioned above, the coming wave can be the wave that takes this market to new all times highs. A solid catalyst must accompany this market in order to make a Wave 3 of that magnitude possible. Just something to be aware of.
In summary, this market is poised to resume the broader uptrend. It is anyone's guess how price action will unfold on 8/1 and technical analysis will not help until after the event is absorbed into the system. I am willing to take a small position only if my plan allows, and it will be adjusted for any wild gyrations that may result Tuesday. Until then I expect price action to behave more randomly within this low volume environment.
Thank you for your post, being a rookie to the trading world I have continued to enjoy reading your posts and expanding my own education from your experience. I have been watching the 177 - 180 area closely, and even if it does break and head towards 140 would you agree that it will bounce back to the 200 area very quickly? Making even this region of still a relatively ok position for a Medium to Long entry point? My gut tells me that the 140 area of support wont be broken. Also even with the uncertainty of the Aug 1st deadline , there seems to be some sort of understanding that everyone will be buying into bitcoin at the last min, in order to get a share of the new coin as well, which will keep this market in the chop but once Aug 1st passes I feel there will be a hard surge back into this market causing a strong bull. Is this a rookie way of thinking?
DanielBeasley
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@DanielBeasley, And as Im reading and typing it bulls to 200... Go figure lol...
JoshuaVanier
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@DanielBeasley, If it tests $140, no reason it won't test $89
MarcPMarkets
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@JoshuaVanier, if it falls through the 136 low, then sure 89 is possible, but IF it makes a low above the 136 level, that would be a higher low. And higher lows imply buyers. They are more likely to lead to higher highs.
JoshuaVanier
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@MarcPMarkets, Thanks for the insight and informative market analysis
DanielBeasley
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@JoshuaVanier, Yes, there is a reason it wont test 89. 140 Is a extremely solid resistance point for one. the strongest eth has, really the most the only true solid one its had. Timing is another, it wont have time to push threw it, the surge of bitcoin buys will keep eth head above water even if it dropped to 140 right now. So keeping those two things in mind, after the Aug 1st scare is over, which will be fast considering theres not much support for drastic changes, bitcoin will be topped out from the surge of buys and most will convert to eth, causing a launch. Thats just my opinion anyways, and so far my opinion has been really spot on. Eth is a good buy. it might go backwards a for a short time, but it will be back in the 230s min next week. If it goes back to 180 Ill go large.
JoshuaVanier
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@DanielBeasley, Interesting reasoning, thank you for the insights. I bought back in a large chunk around $205, the rest I'm holding to see if it hits 180 prior to Aug 1st, will be interesting to see how this all played out in hindsight.
Jour
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I agree with your analyse. I think, must be prepared for very dynamic market movements after 8/1. Ups and downs, but in uptrend.
MarcPMarkets
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@Jour, yeah the initial move will most likely be large and highly random. As long as the bullish structures hold, I will be to buy at some point.
WaineNZeddmo
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I agree with you, next week there will be major expectation, and cryptos may rally extremely for 2 or 3 days. Do you have any suggestion on the portfolio? if there is a rally, we want to bet on the winners, for sure.