The market is making us face the possibility that our bullish Ethereum (ETH) thesis may not be correct. We are not giving up right now, but we do want our readers to be ready if Ethereum (ETH) goes down.
If Ethereum (ETH) does move lower, the ETH contract at BitMEX could play an important role in hedging. So, we decided to take a look at that chart. We found two things. First, false breakouts above the 21-day moving average have produced more significant declines. That makes us feel uncomfortable that Ethereum (ETH) broke above its 21-day and then came back below it.
The second thing we noticed is a diamond formation. Diamonds can produce explosive moves depending on which way the market leaves the diamond. If ETH breaks out of the top of the diamond, a move to 260 is possible. If ETH breaks below the bottom of the diamond, ETH could move to 100.
Bottom Line: Ethereum (ETH) should be rallying, and it isn't. That doesn't necessarily make us bearish ETH. It does, however, force us to develop a trading plan if ETH does going down. In crypto, you can never be too prepared.
If Ethereum (ETH) does move lower, the ETH contract at BitMEX could play an important role in hedging. So, we decided to take a look at that chart. We found two things. First, false breakouts above the 21-day moving average have produced more significant declines. That makes us feel uncomfortable that Ethereum (ETH) broke above its 21-day and then came back below it.
The second thing we noticed is a diamond formation. Diamonds can produce explosive moves depending on which way the market leaves the diamond. If ETH breaks out of the top of the diamond, a move to 260 is possible. If ETH breaks below the bottom of the diamond, ETH could move to 100.
Bottom Line: Ethereum (ETH) should be rallying, and it isn't. That doesn't necessarily make us bearish ETH. It does, however, force us to develop a trading plan if ETH does going down. In crypto, you can never be too prepared.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.