Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer

Currencies / Ethereum Nov 16, 2017 - 10:25 AM GMT

By: MarketsToday

Currencies

  • Long-term bullish setup
  • Short-term bullish setup
  • Bull trend continuation entry setting up for short-term

Low volatility leads to higher volatility

Since June, volatility in Ethereum (ETH/USD) has been declining with a potentially bullish multi-month symmetrical triangle consolidation pattern forming over that time. Keep in mind that low volatility leads to higher volatility.


The pattern seen on the daily chart can also be looked at as a bullish pennant trend continuation pattern on a weekly chart. Either way, since this classic consolidation pattern follows a greater than 6900% rally in 6 months, starting from the December 2016 low, the odds favor an eventual resolution to the upside. At the same time we always must be prepared for the opposite, a breakdown in this case.

Ethereum is getting closer to the apex of the triangle and we can therefore anticipate that a breakout should occur within 2-3 weeks, if the triangle retains its integrity. After that the validity of the pattern becomes in doubt if a breakout has not yet occurred. Ideally, a breakout would occur this week or next, given where price is now relative to the apex.

Short-term outlook
Nevertheless, the above analysis is also important for the short-term outlook since ETH is inside a narrowing consolidation range and therefore follow-through is likely to continue to be diminished until a breakout of the larger pattern and therefore dominant pattern, occurs.

Since the triangle is an obvious pattern to anyone with basic technical analysis knowledge, we also need to anticipate the possibility of a sharp drop to the downside initially that can shake out weak holders before an upside breakout kicks in, if it is to do so. There’s no way to know if this type of price action will happen but we don’t want to be too surprised if it does.

Breakout potential

If ETH does breakdown then watch for potential entry points to take advantage of a subsequent potential rally back into the pattern in preparation of an upside breakout. Support of the pattern is currently identified with a prior swing low around 273.50. At that point ETH would be below the uptrend line.

This is an aggressive engagement technique and caution is advised as a drop below the trend line is generally considered to be bearish, and it might turn out that way. So, be clear on your trade plan and risk management strategy, and know what would need to happen for you to turn bearish instead.

On the upside, the higher downtrend line (top line of triangle) gives us a potential target for a long position in the near-term. Note that in the enclosed 2-hour chart that ETH has already broken above the internal downtrend line (short-term bullish). In addition, the prior swing high of 328.8 has been exceeded thereby triggering a continuation of the uptrend on multiple time frames.

Even though the top of the triangle is up around roughly 375, there are other lower potential targets of resistance from Fibonacci ratio analysis. These can be seen on the enclosed intraday charts.

Bull trend continuation

Over the past four days or so an uptrend has been developing within a larger uptrend. Zig Zag lines have been added to the chart for visual clarity. The Fibonacci levels on the chart are possible targets for the current short-term uptrend before it becomes exhausted.

For a bull trend continuation entry we can zoom in further to the 30-min. chart to look at possibilities during a pullback. On this time frame the most recent swing low is at 314, and therefore below there where one might place a protective stop. If waiting for a pullback to the 61.8% Fibonacci retracement the target entry would be around 323.84, and if lower, near the 78.6% Fibonacci retracement the entry would be around 319.51.

Bruce Powers, CMT
Chief Technical Analyst
http://www.marketstoday.net/

© 2017 Copyright Bruce Powers- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in