Analysis for Ethereum against Bitcoin. How is the first altcoin doing in the market uncertainty? Updated trading scenario.
In this post, I applied the following tools: Japanese candlestick patterns, all-round market view, market balance level, oscillators, trading volume, key levels.
Today, I’m going to analyze how Ethereum is trading to Bitcoin.
I analyzed the previous weekly news in my last forecast. Nothing has changed since yesterday. In general, the news background is neutral. I can’t distinguish very negative or very positive news that could move the market. So, to better understand the cryptocurrency market sentiment, I’ve studied the ideas, suggested by different analysts from all over the world.
In short, the common idea is that the cryptocurrency has touched the bottom!
However, the majority expects another downward momentum to confirm the support at lows.
As for the ideas related to ETHBTC, many emphasize the triangle in the weekly timeframe (see the chart below).
The opinions differ only in the matter of what leg should be thought relevant.
According to technical analysis, more relevant levels are the ones that have been confirmed many times by the price.
So, in this case, you see that the most active line is marked with small dots and January’s extreme can be ignored.
I’ve never sought to always stick to the contrary position to that of the majority, but, according to this logic, Bitcoin should receive and upward momentum, and so, Ethereum, following the common sentiment, should break the triangle from below.
I suggest we evaluate this idea, according to technical analysis, below.
In the monthly timeframe, it is clear that the last candlestick of the current month remains within the previous one. This formation coincides with the pattern of equilateral triangle, confirming the common idea of the price strong move soon.
Another important thing is the price rebound from Keltner channel’s top border. There is a visible strong resistance at 0.0815 BTC that can push the ticker towards Keltner channel’s moving average.
On close examination of the weekly chart, it is clear that the triangle’s bottom leg has already been broken through and the ticker has moved beyond Keltner channel’s borders. Moreover, the last weekly candlestick has already broken through the previous lows, which also suggests the market weakness and ETHBTC possible dive even deeper.
Oscillators in the weekly chart also indicate a strong likelihood of a deeper fall.
MACD is in the red zone’ and RSI stochastic paints a rounding with a possible move downwards.
The first support level for the ETHBTC ticker is at 0.070 BTC.
However, in the chart above, we see the breakout of Keltner channel’s balance level (green moving average), and so, the main target for the next few weeks will be at 0.0651 BTC.
According to fractal analysis, there is a clear series of cycles in the form of arcs in the daily chart. They may indicate big traders’ strong support at 0.0725. It is clear that when the price approaches this level, the coin is bought out, forcing the market to go up for a while.
However, the situation is complicated now as the triangle’s bottom leg is broken out, which a visible level, making it much harder for market makers to hold the market.
Any fractal model features mirroring. So, ETHBTC is likely to show the same, when the cycle will turn 180 degrees and will be drawn with a rounding downwards.
Nevertheless, oscillators contradict this idea. They are already at the window bottom part and moving lower is unlikely without a bullish correction. RSI stochastic is in the oversold, suggesting at least a slight price rebound in the short term.
In the four-hour chart, there is a deep cavity inside the wide trading range between the levels of 0.065 and 0.085 (marked with the blue arc). As a rule, the ticker tends to fill such hollows with trading volume, so it can move towards 0.065.
We can also see in the chart that May’s low almost coincides with 0.50 Fibonacci level from the last growth wave, which strengthens the support at the level. 0.382 Fibonacci from the uptrend strengthens Keltner channel’s bottom border, suggesting a rebound from this level, if the price reaches the border. In general, the price can well be corrected towards these levels within the bearish correction to the last bullish trend.
Ethereum is trading down against Bitcoin. The correction is likely to continue.
The first support level is at around 0.079 BTC; it’s highly likely to be reached by the price.
A sideways trend may emerge in this price zone. If the market is weak, the price will go down to 0.066 – 0.065. Next, it is likely to retrace to the base level at about 0.070 BTC – 0.075 BTC.
Global trend is downward. The correction target is at about 0.055 BTC.
This scenario will be confirmed if level 0.065 BTC is broken out.
Moving up is limited by level 0.074 BTC (highly likely to be touched by the price) and level 0.077 BTC (might be touched).
The price will hardly go higher than 0.077 BTC.
Finally, my forecast is quite similar to most analysts’ opinion about possible moving down.
Will the market follow the majority view? We’ll see soon.
I wish you good luck and good profits!
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.