ETH Bearish Wedge or Wedge Trap
Updated
A few days ago i posted a few charts on ETH in my public channel, showing that triangle on the right. Which could maybe give an answer to whether the bearish wedge on the left is real or a trap, this is what i said 3 days ago:
This might even be the most realistic scenario i think. Assuming Bitcoin will break 7600ish and do that stop hunt. Would prob mean ETH does a move like this. Breaking up from that triangle, but not pumping big, but instead making a low volume breakup between 196/200ish (which would be inside the wedge as well) and then make a big dump.
A fast rally above 205ish, would prob mean i am wrong and ETH is bullish. So a fast strong rally up with strong volume. A slower move with not convincing volume, would keep the wedge in play
Now the problem is, it's like in the middle of both scenario's. It didn't really rally above 200 towards 205+, but it also did not get a real rejection yet. The volume inside of the (bigger) wedge is NOT confirming a wedge, when using the smaller one (yellow wedge), you could maybe say the volume is dropping. Usually, in a situation like this, the longer it takes to drop and instead going sideways, the bigger the chances become for a bullish move. Would say maybe one more day left for the bears.
On the right we can see that triangle and the bull flag that came after it. But the breakout of that bull flag is pretty weak, so could be a sign of bulls loosing momentum and the market might be at it's high. Also see it broke that uptrend line (purple line) and at the moment still testing it as a resistance. For that pattern, it says 197ish is the max for the retest and a break of 192ish COULD mean a acceleration down. If that doesn't happen after a break of 192, it could mean that sideways movement after a wedge break, which usually results in like a bear trap and see another move.
So would say, if 192ish breaks, for the bearish wedge to be in play, it needs to dump big and high volume, where i think 186ish is the key level. So think a break of 186, could mean a trend change, anything above it could all just be noise/consolidation. It is also likely to say, that if it is all a bear trap, we should see a counter move. With that i mean, that we should see a big rally, a move to like 215/225. If that would happen, there is a serious chance that the market low is really set and we simply continue the bull trend. Anything weaker, still puts bulls in favor, but then we could still see a big/decent correction at some point. Remember the bearish wedge i posted on Bitcoin few months ago? Broke up but never accelerated and eventually market dumped big time. Similar situation now i would say.
If ETH was an independent asset, this would be a super short for me, without a second doubt. This is the best setup to be able to short the high. But the market has been going up with dropping volume for weeks now AND Bitcoin looks stronger than ETH as well at the moment. So i don't dare to really give my personal direction here.
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Previous analysis:
This might even be the most realistic scenario i think. Assuming Bitcoin will break 7600ish and do that stop hunt. Would prob mean ETH does a move like this. Breaking up from that triangle, but not pumping big, but instead making a low volume breakup between 196/200ish (which would be inside the wedge as well) and then make a big dump.
A fast rally above 205ish, would prob mean i am wrong and ETH is bullish. So a fast strong rally up with strong volume. A slower move with not convincing volume, would keep the wedge in play
Now the problem is, it's like in the middle of both scenario's. It didn't really rally above 200 towards 205+, but it also did not get a real rejection yet. The volume inside of the (bigger) wedge is NOT confirming a wedge, when using the smaller one (yellow wedge), you could maybe say the volume is dropping. Usually, in a situation like this, the longer it takes to drop and instead going sideways, the bigger the chances become for a bullish move. Would say maybe one more day left for the bears.
On the right we can see that triangle and the bull flag that came after it. But the breakout of that bull flag is pretty weak, so could be a sign of bulls loosing momentum and the market might be at it's high. Also see it broke that uptrend line (purple line) and at the moment still testing it as a resistance. For that pattern, it says 197ish is the max for the retest and a break of 192ish COULD mean a acceleration down. If that doesn't happen after a break of 192, it could mean that sideways movement after a wedge break, which usually results in like a bear trap and see another move.
So would say, if 192ish breaks, for the bearish wedge to be in play, it needs to dump big and high volume, where i think 186ish is the key level. So think a break of 186, could mean a trend change, anything above it could all just be noise/consolidation. It is also likely to say, that if it is all a bear trap, we should see a counter move. With that i mean, that we should see a big rally, a move to like 215/225. If that would happen, there is a serious chance that the market low is really set and we simply continue the bull trend. Anything weaker, still puts bulls in favor, but then we could still see a big/decent correction at some point. Remember the bearish wedge i posted on Bitcoin few months ago? Broke up but never accelerated and eventually market dumped big time. Similar situation now i would say.
If ETH was an independent asset, this would be a super short for me, without a second doubt. This is the best setup to be able to short the high. But the market has been going up with dropping volume for weeks now AND Bitcoin looks stronger than ETH as well at the moment. So i don't dare to really give my personal direction here.
Don't forget to like if you appreciate this :)
Previous analysis:
Note
Another trap again, just like with Bitcoin, seems as if the market only drops to trigger bears only to push up again. Anyway, looks as if it has bounced up too much already, the curved shape also looks real and also about to break. Maybe 194.5 has some resistance, but honestly, so much random movement past days, only looks as stop hunt for leveraged longs and shorts. Not yet clear to what the intentions are. As mentioned above, for ETH it looks down, but Bitcoin is more neutral/bullish.
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