Ethereum Exhausted? Price Action Analysis
Hello Everyone,
I believe Ethereum is approaching exhaustion. Does this mean we will see a large correction or start of a bear market? No, I personally believe we will continue higher but a short term 10% correction is needed to pass through $3,550.
Here are my reasons for this:
1. The current pattern is an Ascending Wedge which is typically a bearish pattern. Breaking down below the lower support line will confirm this pattern and initiate bearish momentum downwards.
2. Price action (Volume): Volume is going down on the 4 hour as price is going up. This is bearish price action. I am expecting the next wave of large volume to be a sell off.
3. MACD: MACD is showing increasing selling momentum on the 4 hour. This is validated by price action.
4. The largest volume candle is red. Typically, this means bears have a lot of control at the next resistance level being $3,550. I believe Ethereum needs to correct some in order to regain the momentum to break through $3,550.
5. RSI on the 4 hour is showing bearish divergence. This is when Ethereum is making higher highs in price and lower highs on RSI. This is validated by price action.
6. Fundamental analysis: The Whale Alert indicator is showing a lot of Ethereum coming off wallets and on to exchanges. This indicates profit taking interest from whales.
7. Bitcoin's current state: Bitcoin is in a very uncertain state. It has not shown bullish confirmation and continues to create lower highs. If bitcoin goes down, it will take the alt coin ship with it.
With all of this said, a large wave of volume could come in and push price towards the upside. This would invalidate the bearish claims and most likely put a close above the resistance line of ascending wedge making this once again very bullish. I hope this analysis helps you make a more calculated decision if you were thinking about buying ethereum.
As always, be patient, use risk management, and good luck trading.
I believe Ethereum is approaching exhaustion. Does this mean we will see a large correction or start of a bear market? No, I personally believe we will continue higher but a short term 10% correction is needed to pass through $3,550.
Here are my reasons for this:
1. The current pattern is an Ascending Wedge which is typically a bearish pattern. Breaking down below the lower support line will confirm this pattern and initiate bearish momentum downwards.
2. Price action (Volume): Volume is going down on the 4 hour as price is going up. This is bearish price action. I am expecting the next wave of large volume to be a sell off.
3. MACD: MACD is showing increasing selling momentum on the 4 hour. This is validated by price action.
4. The largest volume candle is red. Typically, this means bears have a lot of control at the next resistance level being $3,550. I believe Ethereum needs to correct some in order to regain the momentum to break through $3,550.
5. RSI on the 4 hour is showing bearish divergence. This is when Ethereum is making higher highs in price and lower highs on RSI. This is validated by price action.
6. Fundamental analysis: The Whale Alert indicator is showing a lot of Ethereum coming off wallets and on to exchanges. This indicates profit taking interest from whales.
7. Bitcoin's current state: Bitcoin is in a very uncertain state. It has not shown bullish confirmation and continues to create lower highs. If bitcoin goes down, it will take the alt coin ship with it.
With all of this said, a large wave of volume could come in and push price towards the upside. This would invalidate the bearish claims and most likely put a close above the resistance line of ascending wedge making this once again very bullish. I hope this analysis helps you make a more calculated decision if you were thinking about buying ethereum.
As always, be patient, use risk management, and good luck trading.
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