After what seemed similar a reversal from the rigid comport marketplace for the entire crypto-market, many bullish investors establish themselves initially taking net turn a profit from what appeared to hold upward to a greater extent than or less other Double Bottom Reversal. However, when it came fourth dimension to re-test the neckline, the ETH-USD marketplace decided to kicking the bucket on its motility down. So why did the Double Bottom Reversal, outlined inward a previous BTC-USD analysis, non yield the results during yesterday’s rally?
Figure 1: ETH-USD, 1-hr Candles, GDAX, Fake Double Bottom
In the article referenced above, several criteria outline the toll projections 1 tin hold off from a Double Bottom Reversal pattern. One of the most crucial aspect of a Double Bottom Reversal is the book supported on the ii lower peaks of the pattern. In the figure shown above, the left instance of the Double Bottom blueprint is back upward alongside obvious spikes inward book where the marketplace attempted to brand a novel low. However, inward our case, nosotros come across a blueprint that looks similar a Double Bottom, but lacks the required book to actually ship the reversal blueprint inward a pregnant bullish rally.
So, similar a shot that we’ve failed to contrary this comport tendency 1 time again, where does this leave of absence us inward the grand system of things? To seat this marketplace into perspective, it is oftentimes useful to zoom out in addition to catch it on a high timescale:
Figure 2: ETH-USD, 12-hr Candles, Gemini, Macro Bear Trend
One of the most notable things well-nigh this comport tendency is the failure to brand a novel high, fourth dimension in addition to fourth dimension again. Each failure to brand a novel high has been coupled alongside an growth inward overall marketplace volume, which acts an initial indicator that the marketplace however has to a greater extent than bearish pressure level on it. Next, if nosotros motility on to the MACD (an indicator of marketplace momentum), nosotros tin come across ii things:
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The electrical current bearish catamenia is showing no sign of deviation — each relative depression made inward the marketplace is coupled alongside a depression on the MACD histogram.
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Most important, the macro comport tendency shows maintained downward momentum past times the style the indicate line of piece of employment / moving average convey made a novel depression (see the orange, dashed line).
At the fourth dimension of this article, the marketplace is finding major back upward in addition to resistance levels along the Fibonacci Retracement values of the macro Bear tendency (see pinkish annotation inward the ikon above). The mistaken Double Bottom Reversal propelled the marketplace dorsum upward plenty to attempt out the 23 pct retracement value before ultimately pivoting alongside relative ease. On the macro scale, the adjacent major line of piece of employment of back upward lies at our previous low: $175. It volition hold upward a hard-fought battle every bit this is a line of piece of employment of historic involvement inside the lifetime of the market.
As the marketplace proceeds its march toward the bottom, the diverse lines of the Fibonacci Retracements volition play a telephone commutation utilization for entering in addition to exiting positions. Most commonly, before progressing to the adjacent Fibonacci Retracement line, the marketplace volition brand a attempt out of the resisting line of piece of employment higher upward it before continuing the downward trend. The figure below outlines the recurring subject of this macro comport trend’s Fibonacci Retracement tests:
Figure 3: ETH-USD, 6-hr Candles, Gemini, Fibonacci Retracement Trend
It’s solely possible that the marketplace won’t instruct far dorsum downwards to to the 0 pct Fibonacci Retracement values, but, given the downward momentum outlined on several marketplace indicators, it seems far to a greater extent than probable than not. With the massive Head in addition to Shoulders (outlined before this week) on the BTC-USD markets looming inward the background in addition to testing telephone commutation back upward levels, 1 tin only speculate merely how far the crypto-market volition kicking the bucket on its downward move.
Summary:
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A mistaken Double Bottom Reversal formed on the smaller timescales, trapping many people inward a bullish position.
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On a macro scale, the ETH-USD is maintaining its downward momentum in addition to continues to attempt out Fibonacci Retracement values.
Trading in addition to investing inward digital assets similar bitcoin in addition to ether is highly speculative in addition to comes alongside many risks. This analysis is for informational purposes in addition to should non hold upward considered investment advice. Statements in addition to fiscal data on Bitcoin Magazine in addition to BTCMedia related sites produce non necessarily reverberate the catch of BTCMedia in addition to should non hold upward construed every bit an endorsement or recommendation to buy, sell or hold. Past functioning is non necessarily indicative of futurity results.
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