Ethereum has recovered higher in early Friday trade after finding strong technical support from the $220.00 level. The ETHUSD pair is currently trapped within a neutral triangle pattern on the four-hour time frame. A bullish breakout from the triangle pattern would take the ETHUSD towards the $330.00 level, while a bearish breakout may see a move towards the $180.00 support level.
The ETHUSD pair is intraday bullish while trading above the $245.00 level, key resistance is found at the $275.00 and $330.00 levels. If the ETHUSD pair trades below the $245.00 level, key support is found at the $220.00 and $180.00 levels.
Lovely analysis, thanks for that. Big fan of your clean layouts!
I personally am a bit torn. I stocked up a bit at around ~$250, which is why I wouldn't mind a bullish breakout, but at the same time would like to see a bearish breakout, so I can stock up even more at ~220 or even ~180.
Food for thought: which breakout do you see as more likely? The bullish or the bearish one?
OctaFX_Official
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@timn91, hi, thank you for the kind comments.
Sorry for the late reply. We had a bullish breakout :) . Thing is to check the volume on the breakout. Was the volume higher than the average? If so, this could be confirmation that buyers were really in control rather than the sellers just giving up. Next test, is when price comes back to test the breakout level, have sellers returned / buyers given up? If there is no volume to the downside, start looking for a high of a candle to be taken out as this could be the start of the continuation higher.
timn91
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@OctaFX_Official, thanks for getting back to me.
Yes, it was a bullish breakout indeed. Luckily, I decided to "bite the bullet" and buy some more ETH, before the breakout, so all is good :)
I've already checked out your new ETH analysis and today's "market in a minute" video.
I too see BTC and ETH being bullish (for now), but looking at the volumes and overall price action, I'd say we're only days, 1-2 weeks tops, away from a drop. Prices have surged extremely these past few weeks and this simply can't continue, imo.
I think a final leg up to ~$300 for ETH, maybe even a fakeout to ~$325 is all we're going to get from this rally and is, quite frankly, more than we could've hoped for, in such a short amount of time. After that, a healthy correction down to $245, $220 seems realistic to me, maybe even a brief visit of the $180 support.
Would you agree with this or do you see a different mid-term development?
Pressure has been slowly building in BTCUSD since the end of last year. ETHUSD closely follows the volatility of BTCUSD so if BTCUSD is moving higher you can look to buy into ETH.
The stops are being taken that reside at the swing highs, so anyone that is bearish from levels above here will puke at those levels marked in red.
Clearly at 4000 all of the pressure that had been building didn't just pop, a lot of BTCUSD was bought and the accelerated rise is clear for all to see. Someone has doubled their money. Now if you are an institutional trader and you said to your boss that you had doubled your bet in 5 months, someone would have a word in your ear and say maybe now is time to take some profits, or take the rest of the year off. You certainly wouldn't be giving back any profits. Hence anything above 8k is subject to profit taking. If all the buyers stop buying we will get a sharp pullback, unless the retail buyers can match and exceed institutional buying.
Retail traders will obviously be buying into the bull market, so we can expect prices to hit 10k at some point. Institutions that maybe didn't get in at 4k may even help push the price up.
However, it should be noted, institutional buyers wont buy on an up candle. So the only way to see if this price level is supported is to buy at support when there is a retest of lower levels.
Fundamentally, I can't see any reason to buy this now other than it is not correlated to anything else. I would be wary of spikes higher but keen to see reactions on pullbacks.
As long as we are making higher highs and higher lows, I would want to see the stops sat at the swing highs get taken out.
So, either way you look at it, the next few days and weeks are going to be interesting, because we're getting pretty close to those strong resistance levels.
I personally am a bit torn. I stocked up a bit at around ~$250, which is why I wouldn't mind a bullish breakout, but at the same time would like to see a bearish breakout, so I can stock up even more at ~220 or even ~180.
Food for thought: which breakout do you see as more likely? The bullish or the bearish one?