Hello all,
I got scalded a while ago for looking at the small picture, so I decided to zoom out to larger timeframes to throw a guess at what the majority of ETHUSD traders could be thinking.
I have seen two-three main groups of ideas in the 1D timeframe running. Some propose a giant triangle, some a channel, and just a few did a funnel. These ideas are supported by a decrease in volume from the starting point of the structure.
From the picture, interestingly, we can think:
- a breakout of the big triangle occurred, and now the price is testing the upper trendline before shooting up (although the triangle idea has not been validated because there was not a higher volume break out)
- we touched the top of the channel, and now we are on the way down to test its bottom (this seems more likely as we are awaiting volume breakout or price bounce)
Now, I think the point is not what "I" think, who cares, but what *most of the trading volume* think, because that's the direction the market will take. The interesting thing is that the triangle and the channel converge between $3800-$3650, so the plans of people (bulls and bears) that are driven by either idea (triangle or channel) will be converging at nearly the same point. I cannot see more options than the triangle/channel in this 1D timeframe, so I'd say that there is still a bit to go down in ETHUSD to touch around that convergence, and then a big move.
About that big move, now look at the RSI. The top trend line is showing a bearish divergence with price, which started quite a while ago and has not been broken, and is converging with the bottom line that follows price action. That bearish divergence is a big worrisome, because it has been there for a long time. For that reason I think that a bullish stance is fine thinking of fundamentals and the hype, but a lower risk/higher reward entry would be after we breakup from the RSI triangle in high volume. Bears will have a say if we breakdown from that RSI triangle though, because if we break from either the price triangle or the channel, there would be a target to either $2700 or $1650 coming.
note: the RSI is the AverageGain/(AverageGain + AverageLoss). A bearish divergence means that while the price is going up, either the steps up get shorter (less up momentum) or the steps down get longer (gain of down momentum). At some point the imbalance should cause a breakout, crash, oversold and recovering of price up.
Personal view, not financial advice. You draw your own plan! Any thoughts welcome.
I got scalded a while ago for looking at the small picture, so I decided to zoom out to larger timeframes to throw a guess at what the majority of ETHUSD traders could be thinking.
I have seen two-three main groups of ideas in the 1D timeframe running. Some propose a giant triangle, some a channel, and just a few did a funnel. These ideas are supported by a decrease in volume from the starting point of the structure.
From the picture, interestingly, we can think:
- a breakout of the big triangle occurred, and now the price is testing the upper trendline before shooting up (although the triangle idea has not been validated because there was not a higher volume break out)
- we touched the top of the channel, and now we are on the way down to test its bottom (this seems more likely as we are awaiting volume breakout or price bounce)
Now, I think the point is not what "I" think, who cares, but what *most of the trading volume* think, because that's the direction the market will take. The interesting thing is that the triangle and the channel converge between $3800-$3650, so the plans of people (bulls and bears) that are driven by either idea (triangle or channel) will be converging at nearly the same point. I cannot see more options than the triangle/channel in this 1D timeframe, so I'd say that there is still a bit to go down in ETHUSD to touch around that convergence, and then a big move.
About that big move, now look at the RSI. The top trend line is showing a bearish divergence with price, which started quite a while ago and has not been broken, and is converging with the bottom line that follows price action. That bearish divergence is a big worrisome, because it has been there for a long time. For that reason I think that a bullish stance is fine thinking of fundamentals and the hype, but a lower risk/higher reward entry would be after we breakup from the RSI triangle in high volume. Bears will have a say if we breakdown from that RSI triangle though, because if we break from either the price triangle or the channel, there would be a target to either $2700 or $1650 coming.
note: the RSI is the AverageGain/(AverageGain + AverageLoss). A bearish divergence means that while the price is going up, either the steps up get shorter (less up momentum) or the steps down get longer (gain of down momentum). At some point the imbalance should cause a breakout, crash, oversold and recovering of price up.
Personal view, not financial advice. You draw your own plan! Any thoughts welcome.
Price is going up, so my impression is that the RSI could go up until touching its resistance (that would be around $5K). After that, keep an eye because it has been many months of bearish divergence: unless something occurs and more/bigger buyers flock in, price can go down again and may test $3K.
I would keep an eye on the support of the RSI. If we see a hidden bullish divergence (RSI makes a lower low while price makes a higher low in an uptrend), uplift would come quickly.
Not advice, just opinion :)