Price Analysis: A Look at the Ethereum Charts

Journalist:
Jim Fredrickson @jimfred1276
November 7, 2016

Bitcoin has given up some it’s gains in the past 24 hours, but overall the chart has not changed in a few days.  So lets take a peek at ethereum’s daily chart.  Let’s start with a bear setup, and then we will look at a bull setup, to see if we can glean any information from the two charts that might give us a clue as to what might happen next in this asset:

After that spike low, this is really the smallest bear setup we can make from the high.  A few points worth noting is that the 1st arc pair contained price for several months until a breakout was stopped by the 1×1 Gann angle from the high (45 degrees).  That started a reversal that lasted until the spike low was stopped by the 2nd arc pair.  Technically, bouncing off that arc pair was enough to signal an end to the correction.  It is noteworthy that price did not penetrate the arc at all.

However, after it rebounded, price has remained trapped by the 1×1 angle.  However, it is not being smacked down hard by the angle as it was before.  Price is following the angle down, as if it is waiting for an opportunity to breakout again.

So let’s take a look at a bull setup from the low:

The first thing to note it was the 4th arc pair that stopped the big advance – hard. When price met the 4th arc again in late October (pink arrow), it followed the arc down until that spike low we saw earlier in the bear setup.  But interestingly, ever since that spike low, which just touched arc support then bounced hard, price has been working its way through that 4th arc pair of this setup.  Indeed, if it continues moving sideways it will clear the arc pair in just a day or two.  When that happens, the arc that smashed the Spring rally will have been cleared. IMHO, this is bullish.

I for one have my finger on the trigger to execute a buy order in ethereum and/or ethxbt as soon as 2 things happen: A) price closes above the 1×1 on the bear setup, and B) closes above the 4th arc pair on the bull setup.  I have a feeling both will happen in the very near future.

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.

Jim Fredrickson @jimfred1276

Jim has an MBA from the University of Southern California. He has been trading commodities, forex and bitcoin since 1993. You may email him directly at: jimfred1276 at gmail dot com. Feel free to follow him on twitter.