Ethereum Did Not Disappoint

By
October 18, 2016

Editor’s note: This analysis was written in the hours leading up to the Ethereum hard fork.

Well, as expected, ethereum has turned up, though it was bit sooner than I had been expecting.  But this is hardly reason to complain. :)

Still, the rather dramatic rise led me to want to take a closer look at ethereum’s chart, so I drilled down a bit deeper and opened a 4-hour chart.  (If you recall, up to this point we have looked at the daily and the 8-hour charts.)

Here is a bear setup from the high, using the high of the retracement to size my setup.

As you can see, pricetime hugged the setup all the way to the low where it bounced off 3rd arc support.  At that point it looks like we really need a bull setup from the low, but take a look at the circled area to the right.  Lets blow that area up a bit so it’s easier to see:

Price moved sideways until it hit the 5th arc, and has rallied 75 cents since then.  Truly amazing.  I’ve seen how price moves according to geometry a million times, but it never ceases to amaze me.

It is clear that the arc has provided strong support, and we ought to be looking to add to any long positions.

At this point I suspect that the bear setup we are looking at has “expired” so to speak.  We really need to be looking at a bull setup now.  So lets look at one from the recent low:

I tell you honestly, I am a bit uncomfortable with the fact that with the exception of the highlighted areas to the left of the chart, the market has not been following this setup all that closely.  So I’m a bit concerned that this might not be the best setup.  However, look at the last red arrow on the right and you see that price has taken off as soon as it cleared the 3rd arc pair.  This is very bullish, and supports the argument that this is likely an opportune time to look to add to long positions.

Happy trading!

Remember:  The author is a trader who is subject to all manner of error in judgement.  Do your own research, and be prepared to take full responsibility for your own trades.

Image from Shutterstock.