Direct from the desk of Dane Williams,
exclusive to leofinance.io
Key Takeaways:
- Ethereum rips through resistance to fresh highs.
- Market remains in an extremely strong, bullish trend on the daily and above.
- As a result, our bias remains to only trade from the long side.
Ethereum Technical Analysis
One of my favourite sayings when it comes to support/resistance trading, is that 'resistance is resistance, until it's not'.
Well, a perfect real world example of this saying has been playing out on Ethereum and is worth taking a look at on the blog today.
The last time we spoke about ETH/USD, you may remember we had Ethereum struggling to print fresh highs as price just couldn't seem to break through the daily resistance zone at the $2,000 psychological level.
As long as price was being capped by resistance, our bias was to day trade Ethereum from the short side using the resistance is resistance until it's not concept.
But as you'll see on the following daily chart, price soon made light work of the zone, blasting straight through as the bulls took control.
ETH/USD Daily:
With resistance no longer resistance, our bias flips to only wanting to trade the pair from the long side.
Let's zoom into the Ethereum hourly chart and take a look at the intraday price action to better explain why.
ETH/USD Hourly:
You can see that price ripped through resistance on the 10th.
It was here that with price now above our daily zone, our bias flipped to only wanting to trade from the long side.
Our strategy says to mark the last place of short term resistance (last red candle) that when retested as support, could be used as an entry.
Unfortunately, you can see that while price did pull back on the 11th, it missed our entry zone by barely a few pips.
As a result, I missed getting long before this move.
But for purposes of the blog, I've marked a potential second area of short term resistance that could have been used as an entry just a little higher.
It's a little bit messier, but the concept is exactly the same and worth noting.
Best of probabilities to you.
Data to Watch:
- Not applicable on decentralised cryptocurrency markets.
Why not leave a comment and share a chart of your own in the comments section below? All comments that add something to the discussion will be upvoted.
This daily market analysis blog is exclusive to leofinance.io.
Posted Using LeoFinance Beta
Feeling like I really missed out with ETH, didn't get invested in it, feel like that could prove to be a mistake
Posted Using LeoFinance Beta
Honesty, we've all been saying that $1000 was too late, then $1500 was too late, then $2000 was too late...
If you're looking to invest long term, then just buy it at any price and put it in cold storage.
The truth is that in the grand scheme of things, even at $2500, you're getting a good early entry.
Posted Using LeoFinance Beta
I hear you, my lack of patience is always being tested by this market. I know that if I buy and HODL it'll all work out, I'm just being a fool honestly!
Posted Using LeoFinance Beta
Thanks for the explanation. and another tips and details on the strategy to take note of. :)
with the price miss the first support on the pullback after the breaks, will you still make a trade, or just let it go instead?
Posted Using LeoFinance Beta
It's purely up to you.
In this example, I missed an entry on the first pullback just because price didn't quite pull back into my intraday zone.
But then you can see that if you had have taken an entry on the 2nd pullback, then you would have made money.
All that matters on any entry, is where you place your stop loss and what that does to your risk:reward.
Posted Using LeoFinance Beta
Excellent analysis, no doubt that was the perfect entry. Unfortunately I was not very attentive to ETH.
Posted Using LeoFinance Beta
Ah, so I wasn't the only one that missed the entry haha.
It's okay, we have Ethereum exposure via our LEO thanks to how much money is in wLEO :)
Posted Using LeoFinance Beta
Hahaha yes my friend. In fact, I think it's time to buy more LEO.
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