Patience is a virtue in the game of trading and this month-long sideways price action for Ethereum tested every ounce of my patience. If you held true to the charts and stayed patient you should be sitting happy as ETH broke for a whopping 25% drop from 286 down to 211 just missing our first target by mere dollars(108). The question is though, is she done?
https://abacusjournal.com/wp-content/uploads/charts.jpg 653 1000 Rogue Trader /wp-content/uploads/logo-header.png Rogue Trader2018-09-06 23:22:152018-09-06 23:22:15The Problem With Ethereum; Technicals Show Potential Capitulation On The Horizon
With that lets dive into the H4 chart to see if we can gain any clues to what lies ahead of us. Upon a wave analysis, it seems we are making a small bear pennant in the micro trends which is common for the position PA is at. This calls for a continuation of the previous trend as pennants are continuation patterns as well as being in a w4 of an impulsive structure down. We are pretty oversold in many time frames minus the time frames below H2. Taking all this data into account you will notice ETH and BTC both creating hidden bearish divergence as the price is flat and RSI and STOCH begin to run north signaling exhaustion.
Overall we see a bearish continuation for the time being with a potential to flip bullishly if we can sustain the 200 zone after we break through it. It will take a lot to do this but it is a possibility.
Day traders and scalpers alike could look to enter shorts in this zone as we notice micro bearishness, look to close out all positions at the arrival of our targets.
Swing traders who are in from 280+ may also consider closing the majority of their positions and look to re-enter upon confirmation of zones not holding. Some traders may wish to long this as we should create H1 bullish DIV and an extremely oversold H4-H6 STOCH/RSI.
With BTC at the edge of the cliff we must ask ourselves, when will the well run dry? When will buyers not come stepping in, as this will be our 5th touch in this zone? If BTC breaks its 5.8-6k support it may trigger capitulation across the market. Be ready, be protected, and always have a backup plan.