Time to Take a Look at Ethereum Again

Ethereum Ether
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Today we are going to look at Ethereum’s daily chart.  First, let’s construct a 34 candle bull setup from the period that started the bull run in Jan 2016:

5a

We can see that the market is respecting this setup by observing that the market reversed strongly at the end of the 1st square (pink arrow).  Reversals often happen at the end of a square in time.  Eventually, the advance was solidly stopped by the 4th arc and the top of the 3rd square (red and blue arrows).  Note that the coin’s price has been generally constrained by the top and the bottom of the 2nd square.

Given that the advance was slapped down hard by the 4th arc, it seems only common sense to construct a bear setup from the high.  We see this picture emerge:

5b

This is one of two reasonable ways to construct a bear setup in this case.  But both setups draw a similar picture.  We are very close to the 1st arc pair.  We can get there by falling just a bit more in price.  Or, we can stay at the present price and move forward 10 days or so.  We will touch the arc soon in any case. I have drawn an arrow at a place in pricetime we might expect to touch the arc.

What will happen when the arc is hit?  I can’t know for sure, but my guess is that the arc will provide the support for another rally.  Why?  To answer that, let’s make note of where the arrow is pointing, then let’s draw another bull setup on the chart. A bigger one – 89 candles.

5c

This setup does not appear to be as well respected by the market as the smaller bull setup we see in the first chart above.  But, it shouldn’t be dismissed too quickly, because the 1×1 and the 2×1 Gann angles are being respected.  Noting that, notice that the arrow of the bear setup is now pointing at the 3×1 Gann angle on this setup.  This suggests that in addition to the 1st arc support we saw in the bear setup, we have Gann fan support at the same point in pricetime.  My guess is that the combined support will hold.  We will see.

On this 89 candle bull setup we are just a couple weeks from hitting the 2nd arc pair.  That is also the time frame we will hit the 1st arc of the bear setup if price stays at the present level.

All in all, I have suddenly become rather interested in this asset.  I am glad we looked at Ethereum today. I am going to watch it very closely from now.  I have a suspicion it will get exciting again within the next couple weeks.

Happy trading!

Disclaimer: 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 Ethereum. Charts from Kraken.

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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.