ETHUSD Perspective And Levels: Structure Still Signals Strength.

1 août 2017

ETHUSD Update: With the big event seemingly out of the way, it appears the outcome was a non event in terms of price action chaos. The higher low that I wrote about in my previous report held and has lead price to a higher high at the 232 area which now puts it within striking range of the 241 resistance (.382 of recent bearish swing). With the compound bullish structure in place, this market is strong and it is reasonable to expect the 241 resistance to be compromised.

The only thing that surprised me about these markets was the lack of chaos. I thought a price spike was more than likely, but maybe brokers like Coinbase helped to mute that kind of price action with their market controls (preventing their customers from trading). None of the bullish technicals were compromised, and price action has only further confirmed strength with the current higher high in place at the 230 resistance.

If you missed out because of all the uncertainty surrounding the BTC drama, it's okay because there will be plenty of opportunity to buy back into this market. If the market is going to trend back up into the 300s, there will be plenty of retracements along the way that will offer attractive reward to risk in my opinion.

The support levels that I am watching closely for a reversal signal are the 210 area support (inverted resistance) and the 190 to 180 support zone. IF price can retrace back to either one of these areas, and I get a validated reversal, I will most likely use 195 as my stop if my entry appears at the 210 area. And a low 170s stop if my entry appears in the 190 to 180 zone.

IF the 241 resistance gets taken out, I expect price to find it's next hesitation in the 250 to 280 resistance zone (.618 of recent bear swing). This is a good reference area for short term targets and to measure reward/risk. For example if I get long at 210, and my stop is 195 and my first target is 250, my RR is something like 2.5:1. That is more than acceptable.

As bullish as the price action appears, there is always a scenario that can void the whole evaluation. In this case, if price falls below 163 for whatever reason, that will prompt we to reevaluate my bullish outlook and hold off on any long positions at that point.

In summary, the hard fork was a non event. Price structure has only signaled further strength and as volume returns to these markets, I believe it is reasonable to expect the current resistance levels to be take out. This doesn't mean go nuts and buy highs, there will be buying opportunities, it is a matter of patience. I am now waiting for a revisit to the 210 level for a possible long entry upon a reversal signal.

Comments and questions welcome.