Hi friends! Welcome to this update analysis on Ethereum! Looking at the four hour chart, we can see that ETH has fallen from the bear flag , and formed a small new downtrend channel (blue dots.) It's currently pushing into the 200 EMA , as the sell-side momentum continues to pick up. Taking a closer look inside of this new channel, we can see that there was a decent amount of action around the 50 EMA (in orange,) which produced two failed attempts break above. Ethereum -2.99% wants to go somewhere, and clearly, up is not the direction that it wants to go. It appears to be building a small bear flag on top of the 200 EMA , which increases the likelihood that it will break. If you look closely, you can see a head and shoulders formation inside of the bear flag and the channel. I didn't want to draw it on the chart, because there would be too many things in one area. However, it is there. I've taken the liberty to draw a pink downtrend channel , just to highlight the potential downside. I'm not saying it will happen, but another test of the bottom of this falling pink channel, will put Eeth well under $600. I'm not saying that WILL happen — I'm just illustrating how, and why, it is definitely possible.
To recap the recent action, we can see that a large head and shoulders formation was made at the all time high. That head and shoulders immediately collapsed, dropping below the rising parallel channel (in green,) and producing a bearish pennant flag. From there, the bear flag broke down, and has produced another head and shoulders pattern. Also, the MACD is expanding to the downside, after a recent bearish crossover (red circle.) Additionally, every attempt to get above the 50 EMA , since the all time high, has been a failure. Overhead resistance is substantial, while downside support is minimal. Therefore, the path of least resistance, is still down. Let me be real with you now. If the bulls can't get Eeth back above the falling pink channel, it's game over — lights out — hasta la vista — sayonara! You get the picture. =D
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
This information is not a recommendation to buy or sell. It is to be used for educational purposes only.
