Regular readers will recall that I suggested yesterday morning (China time) that it was time to pull the stops in very tight on ETH. Those following me on twitter received a pic of a rising wedge chart pattern before and after it broke, with the implicit suggestion that the market was showing signs of an impending breakdown. That breakdown came, but not until after the chart registered a double top which can only be described as nerve-wracking to the extreme.
Still, I suppose I should have foreseen the possibility of a brain-bleeding double top, as that is what it took to get pricetime to touch the 3rd arc on this setup:
Looking closer at the breakdown, we again get a confusing picture, because there are two perfectly reasonable bear setups from the first top. The smaller of the two shows that the fall went EXACTLY to the 5th arc. Suggesting the worst of the selling is over:
But I am bothered by the fact that there is an energy point on this chart several hours from now. Intuitively, it feels like it will be a lower low? So let’s look at the slightly larger bear setup from the first top:
This setup suggests a low ~ $68-$69, possibly this afternoon (remember, I am writing in China time, GMT +8).
Bitcoin rallied yesterday, so I thought it was time to look at that chart. The longer-term setup on the daily chart shows an energy point in 10 days time. This is just after the end of the setup in time. The top of the square is resistance, at $1500.
Let’s look at a shorter-term setup for confirmation:
Here on this setup we again see resistance at $1500 in the form of a 5th arc, on the day of the energy point. There is plenty of time however for XBT to rally past $1500 before then. If that should happen, the top of the setup is likely to stop the advance at ~ $1700.
Remember: The author is a trader who is subject to all manner of error in judgment. Do your own research, and be prepared to take full responsibility for your own trades.