Ether and the entire Cryptospace has clearly entered a corrective pattern which is not surprising after going from a low of $360 in early April to a local top of $838 May 6th (an impressive 2.3x over 1 month). Generally corrections of major trends retrace between 33% - 66% of the entire move with the 33%, 50%, and 66% prices being places to look for reversals. If you're a Fibonacci fan you can look to 31.2% and 61.8% areas. Given the top and bottom I will look for signs of reversals at:
- $678 = 33%
- $599 = 50%
- $519 = 66%
We are already seeing the zone around the 33% retrace holding support. This is not surprising given that this zone held for almost 4 days between 4/27-5/1. If I had the ability to be at a computer constantly I would consider daytrading at this level with a target of selling the position near the falling trend line around $705. However, I think this is a risky trade and I can't give it the attention it needs.
The next support will likely be around $599. I do not think it will give strong support and if we do retest it I suspect we will fall right through it toward the 66% retracement. Around $519 is where I hope to be a buyer if the market shows signs of reversal. If not then we may test the critical support levels of $400 and $360. Typically a retracement past 66% (or 61.8%) signals something more than a "correction." It often signals a broader trend reversal and I would expect to see accelerated selling and mass carnage. For my long term positions I hope this isn't the case. I hope what we are seeing right now is a wave 2 of an Elliot Wave cycle which will be followed by a massive wave 3 but I've stopped trading on wishes and started trading on technicals.
***This is not investing advice. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
- $678 = 33%
- $599 = 50%
- $519 = 66%
We are already seeing the zone around the 33% retrace holding support. This is not surprising given that this zone held for almost 4 days between 4/27-5/1. If I had the ability to be at a computer constantly I would consider daytrading at this level with a target of selling the position near the falling trend line around $705. However, I think this is a risky trade and I can't give it the attention it needs.
The next support will likely be around $599. I do not think it will give strong support and if we do retest it I suspect we will fall right through it toward the 66% retracement. Around $519 is where I hope to be a buyer if the market shows signs of reversal. If not then we may test the critical support levels of $400 and $360. Typically a retracement past 66% (or 61.8%) signals something more than a "correction." It often signals a broader trend reversal and I would expect to see accelerated selling and mass carnage. For my long term positions I hope this isn't the case. I hope what we are seeing right now is a wave 2 of an Elliot Wave cycle which will be followed by a massive wave 3 but I've stopped trading on wishes and started trading on technicals.
***This is not investing advice. All investors should seek guidance from licensed financial advisers and not random people on the internet.***
Comment:
Price has bounced up toward the falling trendline as I discussed above. I expect resistance from the falling trendline and if the bulls cannot blast above it we will likely fall to the $600 level over the next few days.
Comment:
Price reached all the way up to $740 and has since thrown up reversal candles with an abrupt fall to $705 at the time of writing this. Perhaps I drew the downtrend too steep and I will likely redraw it to capture what I expect is the local top at $740.
I anticipate a drop to the $680-$650 support range. This is where we could see a double bottom and reversal to the upside but more likely I expect a further drop. My mood, as usual, is bearish for the short term to mid term. For my long term holds I would love for the bulls to prove me wrong but I'm doubtful.
I anticipate a drop to the $680-$650 support range. This is where we could see a double bottom and reversal to the upside but more likely I expect a further drop. My mood, as usual, is bearish for the short term to mid term. For my long term holds I would love for the bulls to prove me wrong but I'm doubtful.