I haven’t witnessed such long trading flat for cryptocurrency for a long time. This is certainly a sign...what of? The answer is below.
Attention! In this post the following types of analysis are applied: indicators, trend, Fibonacci levels, fractal analysis and trading volume analysis.
I continue predicting for Ethereum.
Unfortunately, all those, who are waiting with Ethereum long positions opened, will have to wait for some more time.
Since my last forecast, the situation for Ethereum has hardly changed, the indicators are still showing differently directed movements.
The market is trading flat. What will happen next?
Let’s try to find out...
For a start, let’s look at the daily chart of ETHUSD and check if there are any signals of reversal.
Stochastic RSI gives multiple signals.
We see it indicate hidden bearish divergence within the bullish trend (marked with blue arrows). The divergence, in fact, was followed by the correction, but can we consider this signal to have completely worked out?
As we can see in the same Stochastic, there is another divergence within the correction. This time, the divergence is already bullish, however, its rise turned out to be limited, and RSI itself has already entered the overbought zone (see green circle)
At the same time, MACD and Klinger are providing a buy signal, which can completely confuse a novice investor.
In such cases, to clarify the situation, one should change the timeframe.
If you look at 4-hour chart, the situation becomes more clear.
We see regular bearish divergence, so the price growth shouldn’t be expected in the next few days.
If we take a look at Ichimoku, the situation is not so bright here as well.
As it is seen in the chart, Ethereum ticker had been in the cloud for quite a long time, but couldn’t break it out.
For now, as Ethereum is leaving the cloud, it may be corrected, failing to hold the positions.
Following the pattern of inverse fractal model (see the chart above), we see the Trident element be in the final stage. It should be accordingly followed by Origin element, with expected extreme in the trend direction at the level of 720 USD.
This level will trigger an increase in purchases, like getting in a door that's closing fast.
People will buy out these levels, being sure that there may not be such a good chance in future.
Analyzing trading volumes, we see in the chart above that the correction was successfully compensated by a great input of money into the market. However, after the price rebound, its growth is not supported.
Volume profile indicates the strong support zone, a reference point at the level of 680 USD.
In general, according to technical analysis, the chances to enter this zone are rising by the day, however, the price is unlikely to test the lows around the level of 600 any more.
However, strangely enough, the situation, described above, perfectly fits into Fibonacci levels.
In the chart above we see a yellow circle that is a strong resistance.
After weak attempts of breakout, the price is likely to go down below it, where it should find the support in the zone mentioned above, 680 – 720 USD.
This point will be good bifurcation zone for the reversal to start and a new fractal model to form.
In the end...
Summing up all the above, it is safe to say that the prolonged calm in one of the most volatile markets in the world will end up soon.
The beginning of the correction end has already been made.
Hang on for just a week or two more.
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.