Below is a 15 min chart of ETH/USD and this builds on yesterday’s post about which way price may go next. Today my approach is more technical but I will often bring news, events, sentiment and fundamentals into the mix when appropriate.
Yesterday we identified this 248–250 area as a level of interest after the big price/volume spike up and then back down, probably on some kind of news. We talked about how in a mature uptrend these types of late buys often fail to hold their gains and can also leave clues about where to exit (or wait to enter) your positions. As things stand today I’m seeing some technical weakness develop in the chart but it hasn’t yet confirmed itself. You can see the topping pattern after we failed to make a new high today and then the thrust down in price. It would now be my expectation that we should violate this 248–250 zone before we can continue higher. If the market really wanted to show strength it would fail to do that and rally past 266 and repair the damage that developed today. If that happened I would be bullish. These if/then setups are useful because I now have a framework to work with.
If I’m shorter term focused I’m not looking to buy until we 1) go below 248–250 and then re-establish ourselves back above that or 2) we rally right back past 266 and fail to go lower.
If I’m a long term holder I’m staying put and if I wanted to lighten up I’d do so if we broke 248 with conviction. If I want to add to my longs I would wait for resolution of this weakness to make sure I don’t get caught in a much larger pullback.