We’ll update trading scenario for ETHUSD. Is it worth buying now? What is the most popular altcoin promising?
In this post, I applied the following tools: candlestick analysis, all-round market view, market balance level, oscillators, trading volume, trend analysis
I suggest we update the forecast for Ethereum, including last week close and the start of June. As I said in my previous posts, Ethereum has a strong base, made of a powerful development team and long-term development prospects. However, this altcoin is influenced by multi-directed factors, preventing the market form being stable at present.
Negative factors that hinder Ethereum growth for now:
- The market depressive state, unclear Bitcoin trend.
- EOS moving to its own blockchain results in Ethereum additional supply in the market.
- The future Tron transition to its own blockchain, which also adds Ethereum supply to the market.
Positive factors that support Ethereum growth for now:
- Vitalik’s announcement that Ethereum blockchain network is capable of processing millions of transactions per second.
- Two important blockchain conferences (Super Conference, Distributed 2018).
As you see, the news background is, in general, neutral. There are no prominent factors that affect Ethereum rate. To see the situation more clearly, let’s apply technical analysis.
Let’s assess the last forecast's results. In the scenario, dated May 23, I suggested a drop down to 531-490, followed by the price rebound and leaving the bearish channel (see the chart below).
Finally, in fact, I think the scenario to have worked by 90% for today, June 6.
ETHUSD hasn’t reached the target of 662 USD, as it is affected by the depressed Bitcoin. I suggest we studied the new input data in the market and figure out the scenario for the next two weeks. Let’s update the checkpoints in the monthly timeframe, for a start.
In the chart above, we see the ETHUSD ticker is moving along the upper border of Keltner channel. Currently, its level is slightly up, at 544 USD. We see that this border is a strong support and the ticker isn’t staying there for long within the monthly timeframe. Therefore, the zone below the current level of 544 seems to be conditionally safe to buy, as there is a strong buyer. Level 492 USD is May candlestick’s low. The ticker can go lower only if there are panic sales, and there are no fundamental reasons for them.
The nearest support/resistance levels for June candle are in the zones of May’s open and close. In the chart above, I marked the levels with dotted lines at 577 and 670 respectively. In general, candlestick analysis of May still suggests sideways trend. The previous monthly high breakout shows buyers’ positive ambitions. The body of the May candle has strongly consolidated in the top half of the April one, which is also a bullish sign.
In general, the situation in the monthly chart looks positive. The market sentiment will mostly determine the current month’s close. If the candle closes higher than the previous open, it will be a good buy signal. If the close is lower than the May candle body, it will indicate bearish sentiment.
To see the situation in more detail, let’s take a look at the weekly chart.
If we zoom in the price chart, we’ll see the situation, similar to other altcoins, there is drawn a giant triangle. We see that the last week’s low didn’t reach the triangle’s main leg. Finally, there emerged the new support zone, and strong buyer zone is defined, which is marked with green triangle in the chart. This signal suggests the bullish breakout of the equilateral triangle. We see the ticker closely approach the triangle’s upper leg.
Looking closer, we see that last week closed in the form of hammer, indicating the bullish support. The ticker itself is below the market balance level (marked with the purple line at level 648); but the current week’s low is the level of last month’s close, and so, it is the strong support level.
Oscillators in the weekly chart are neutral, stuck in the centre of the indicator window. Finally, according to the weekly chart, we see strong pressure from two sides. ETHUSD is on the verge of the triangle’s upper leg and bears’ resistance is reasonable. In fact, there is nowhere to go back.
Looking closer, in the daily chart we see growing tension between bulls and bears.
According to the chart above, trading volume has shrunk to almost nothing. Bulls are reluctant to buy, bears are unwilling to sell. This situation can’t last for long in the market. The possible sideways trend isn’t going to be longer than till mid-June.
To add details to our scenario, I suggest we look at four-hour chart right away. In the chart, we see two oppositely directed channels. One is ascending, marked with dots; another is bearish, marked with red arrows. The triangle’s top leg makes the descending channel more likely to extend. The breakout of the rising channel will result in the test of the levels at around 577. The ticker won’t be moving for long in this mini channel, its approaching the strong bullish green zone will provide the strong support.
- The triangle’s top leg is highly likely to be broken through.
- I expect the ticker to receive a momentum and move out of the sideways trend in the period from May10 till May 15.
- If there is an upward momentum, the ticker is highly likely to return to the ascending channel.
Key support levels for the next two weeks:
- 577 is highly likely to be touched.
- 544 is less likely to be touched.
- The price will hardly drop below 544.
Key resistance levels for the next two weeks:
- 648 is highly likely to be touched.
- 670 is likely to be touched.
- 810 is less likely to be touched.
I wish you good luck and good profits!
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Price chart of ETHUSD in real time mode
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