Again for ETH we’re starting off with the two week chart, not much has changed other than the lowering of the 10 day upper band resistance of $211, down from $218, so a minor change of resistance.
On the two week chart we can see that price is currently testing the 20 day Moving Average resistance, a break above this could push price to spike upwards to test the upper Bollinger Band of $276, which would be a similar impulsive move inline with Bitcoin, however this would essentially create a new higher high, implying that Ethereum could potentially push higher in the coming weeks, which goes against the Bitcoin analysis, which as we know directs the whole market currently. So I think this is an unlikely impulsive movement upwards. It suggests that we would need to see ETH fail to create a higher high over the next two weeks, bringing the upper Bollinger Band further down for the following two week candle to test.
Looking at the 10 day chart we can see a more realistic upside target, the upper Bollinger Band of $211. We can also see that the previous 10 day candle came down to test support before rejecting upwards, closing within range of two wick support and resistance levels. The current 10 day candle therefore has potential to come down again to test the 9 day moving average of $155 before pushing higher towards the 10 day upper Bollinger Band.
Lets take a look at the weekly chart to have a closer look.
The weekly chart here I’ve highlighted in yellow the range of wick support and resistance.
If we look at the most recent four weekly candles, the first was a large impulsive move upwards, closing above the upper Bollinger Band, which I mentioned in previous posts that this was overvalued, hence the second candle brought price back down into the Bollinger Band, but closed within range of the wick support / resistance. The third candle, last week we can see that price came down to test broken support, scraping the 9 day Moving Average before again closing within the wick range as a bullish Doji (implying the next week (this week), price will push upwards) Finally, the fourth candle, this week, we can see that price is beginning to push upwards, if we can see a break above this wick range then the target upside would be the 10 day Bollinger Band resistance of $211.
However, notice how whilst price is within a range of support and resistance, there is a fair amount of room to the downside to test the dynamic 9 day Moving Average again – so if I were to take this trade based off the weekly chart, I would have a very tight stop loss below the open price of last week ($167) $5 away from current price.
Lets take a look at the daily chart for a closer look.
The daily chart strengthens the movement to the upside, so long as price remains above the 9 and 20 day Moving Averages / highlighted wick range support – and of course we combine our views on market price movements inline with Bitcoin due to the market dominance correlation.
Also, notice the two previous highs on the left hand side at $160, then the most recent high broke above this…. Lets remove the indicators and take a closer look at this:
Zooming in we can see that this break above the two previous highs of $160 has actually formed a head and shoulder pattern – and as we know, if a head an shoulder pattern failed to break below the neckline support, then a continuation to new highs is likely. So this again gives us further evidence that ETH is going to push upwards. But again, I would have a very right stop loss on this trade, as there is still potential for a retest of the $155 region which would be a better entry for a long – this is why I focus mainly on BTC at the moment, as the market is still in a long term retracement stage of the market cycle, and BTC “is the market” analysis on BTC is much more accurate, and still yields in great percentage gains.
This is why we teach that “less is more” in terms of the amount of currencies that you trade.