Things are looking shaky for the past few days. If we are wondering if ETH or crypto market as whole has peaked and headed towards a bear market, let's look at the data for a bit. Let's compare 2017/2018 market peak to today's price action. I did a comparison on BTC a few weeks ago, so I will look at ETH today.
1. First take a look at the parallel channels for the last 8/9 weeks in the last cycle and similar timeframe at present. Both have a 45 degree ish angle. Jan 2018 touched the top side of the channel and fell into the bear market. Feb 2021 looking to be doing the same. So, if March closes below the mid point of the channel, it will be time to become very cautious. And if the channel breaks to the downside then it could mean a macro top is in for now.
2. The bigger clue could be hidden in the accumulation/distribution indicator. It shows the buying power out there. Even though the current price action looks similar to the 2018 top, there are significant differences visible in the indicator. First, I have circled Nov, Dec and Jan candles from 2017/2018. As price moved up each month, accumulation/distribution showed weakness. Nov-Dec curve turned 45 degrees then Dec/Jan curved turned flat before rolling over. If we look at today's price, as it is moving up in price, the accumulation curve is also holding at 75 degree angle.
So, just by this matric alone, the recent dip only looks to be a re-accumulation phase rather than start of a market downturn. To be really concerned, I would like to see the curve rolling over, but that could mean a few more months of higher highs. Even if we want to, there is no crystal ball to say what's going to happen tomorrow. But looking at the data that is available, things are still not doom and gloom yet. Risk management is the key to this market to extract the most gains out of it (I sound like a broken record at this point 😉 ). Good luck out there.
1. First take a look at the parallel channels for the last 8/9 weeks in the last cycle and similar timeframe at present. Both have a 45 degree ish angle. Jan 2018 touched the top side of the channel and fell into the bear market. Feb 2021 looking to be doing the same. So, if March closes below the mid point of the channel, it will be time to become very cautious. And if the channel breaks to the downside then it could mean a macro top is in for now.
2. The bigger clue could be hidden in the accumulation/distribution indicator. It shows the buying power out there. Even though the current price action looks similar to the 2018 top, there are significant differences visible in the indicator. First, I have circled Nov, Dec and Jan candles from 2017/2018. As price moved up each month, accumulation/distribution showed weakness. Nov-Dec curve turned 45 degrees then Dec/Jan curved turned flat before rolling over. If we look at today's price, as it is moving up in price, the accumulation curve is also holding at 75 degree angle.
So, just by this matric alone, the recent dip only looks to be a re-accumulation phase rather than start of a market downturn. To be really concerned, I would like to see the curve rolling over, but that could mean a few more months of higher highs. Even if we want to, there is no crystal ball to say what's going to happen tomorrow. But looking at the data that is available, things are still not doom and gloom yet. Risk management is the key to this market to extract the most gains out of it (I sound like a broken record at this point 😉 ). Good luck out there.
코멘트:
Update after a month; still moving up nicely within the channel, right down the middle. As long as ETH can keep this pace going nice and easy, it can go on like this for a while. Trend is good until it breaks below the channel.
