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My Technical Analysis of Ethereum after Consensus

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Hello! And welcome to my second Technical Analysis for Blox. On todays menu – ETHEREUM. 

If you havent already, please feel free to check out my last weeks BTCUSD analysis here: (insert link)

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DISCLAIMER: Please note that this is NOT a buy/sell recomendation, nor a signal, nor an investment suggestion. This is purely for educational purposes and opinion sharing. I will not be held responsible for any consecuences caused by misenterpreting my analysis. Eventho my methods are somewhat unique and unorthodox, my goal here is not to teach you how to do technical analysis, nor to disclose my analysis/trading strategies, but to present to you my general view of the market situation and prediction (and have some fun while at it).

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Let me start off by sharing with you my analysis, made on May 10th:

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And a todays chart:

Picture2.png

Pretty accurate right? Let’s move forward.

First, let’s take a look at the daily chart for ETHUSD, to get a general feel of what’s going on.

Picture3.png

What we can instantly observe, is an obvious major bullish correction. The bulls rallied almost the same length as the bears stomped the price from somewhere around March 1st to around May 5th. Some short-term traders were even lucky enough to have entered the market at a very discount price of around $360, which brought them a staggering +130% profit in 30 days! Smoking! (Given they weren’t too greedy, and sold it at the right time).

Note: black dotted horizontal lines represent my support&resistance lines. You can ignore them for now.

Picture4.png

So it’s been quite a bullish ride, I agree. BUT… Let’s go back to the daily chart for a second. 

What I can also observe is that there is no clear signs of a continuous bullish trend change. The downtrend line was broken, yes. The rally was strong, yes. But it produced nothing but a new lower-

high.

Picture7.png

As we can see, the last lower-high didn’t quite reach the previous lower-high.

Picture8.png

What I can take from this, is perhaps a hint that the bulls really are out of gas, and that the rally was (apart from the general crypto-market bullish behaviour) produced by some fundamental factors, and hype as well (I recall Mr. Vitalik Buterin, the boy genius behind Ethereum, tweeting some optimistic hints regarding Ethereum). 

Now, let’s ditch the chit-chats, and let’s get a bit more technical. 

Zooming out again, I pull out my Fibonacci tool. 

Picture9.png

Lo and behold – a school example. Pulling the Fibonacci tool from the last major high-to-low, we observe the price retracing back to exactly 0.382 (meaning there was a 38,20% retracement), followed by a drop to my favourite Fibo zone of exactly 1.272, which held it’s ground and didn’t let the bears pass. Can’t get more classic than this, guys. What followed next was a bullish rally up, reaching a Fibo level of exactly 0.618.

I overuse the word »exactly« to emphasize how important these levels are for me. I love it when numbers add up!

Now, let’s focus on the current rally for a bit.

While I still have my Fibonacci tool at hand, let’s try and see what it says about the rally. Pull it low-to-high… BAM! Guess where it stopped?

Picture10.png

You guessed it – the high reached 1.272. Now what did that tell me? To expect a drop in price. But how low can it go? Well if I knew that, I’d be a psychic. But Fibo told me, it will drop down to.. Where? Yes – 0.382. Which it did. Cool right? You see where I’m getting at? Recognize the pattern? Good!

Let’s check out the 4h timeframe as well.

Picture11.png

What a beautiful rally. In trading terms, that’s a 475 pips profit trade low-to-high, with a 16% max drawdown. Now that’s a traders dream. But let’s leave that for some other time.

Note: The blue rectangle is just my markup od a very strong support&resistance zone, drawn somewhere back around March 10th.

We see the price bounced off my top resistance line after breaking through all of the lower ones like it just don’t care. Then it consolidated a bit, before finally breaking the support line (which turned to resistance), after testing it for 2 times prior to that. The third one was the charm, and after it broke the support line, it (of course) went to re-test the new resistance line. Twice. Will the third time be the charm again? I don’t think so. As it just so happent it’s lying on my strong R&S zone as well. And because the bulls seem tired. And because Fibonacci never lies. 

Picture12.png

So… I expected a significant drop in price. Wanna see what happened next?

  

Picture13.png

(Wink-wink). The resistance line held, and the price went plummeting.

I hope by now you have figured out and picked up on my thinking. As noted before – I will not disclose my full TA strategies, but you can already see from what I’m using and showing here, it can be pretty darn predictable.

For now, this is a sum of what I’m expecting to see in the following days (Daily chart):

Picture14.png

We could now witness a wedge pattern break. Why? Again, Fibonacci numbers are adding up too well. Price is currently at the Fibonacci level of 0.382, and by now you should be able to know what that means, and estimate which level is next. 😉

Anyway, this is it for now. This was yours truly, Dani, for all you Bloxters out there. Stay tuned for my follow-up analysis of BTCUSD coming shortly, as well as a ETHUSD follow-up somewhere next week. 

Take care now, and remember: Get better, get Blox!

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