Rising Wedge or Bullish Channel? (Ethereum)
Updated
As I've been mentioning over and over again recently, there are conflicting signals in the market. This is a time when it may be a good idea to manage risk. There is a bullish continuation scenario and there is also a possibility that the market could start to look very ugly. So far, alts have failed to reclaim their massive broken support levels that I was watching yesterday, so things are still looking a bit iffy. So far, these long setups have not been confirmed.
You can see clearly on this chart that Ethereum is in a rising wedge pattern, which is often a sign of bearish continuation. A breakdown of this wedge, could easily send us back down to the low $100 area at least. However, if a wedge like this occurs near a bottom, specifically with increasing volume, it's possible for us also to say that it's an accumulation pattern.
We won't know one way or another until it happens. I'm trying to do my best to figure out what the direction of the market could be, but sometimes it's best to wait. Hence why this is a neutral post. Here are some scenarios I see happening, specifically for altcoins:
Bullish Scenario #1: This is the most bullish possibility. Bitcoin consolidates at or near 6.8K, and altcoins begin to finally catch up. This would make it easy for ETH to break out of its pattern (channel or wedge). A sustained break above 216ish would confirm this scneario in the near term. The reason why 6.8K is so important, is because I think if bulls can hold above it, it signifies a true trend reversal for Bitcoin. This would give people more confidence to buy alts like ETH. So far, the market has actually been following the most bullish possible scenario. Things can change quickly though.
Bullish Scenario #2: Bitcoin retests 6400ish as support; ETH corrects to the bottom of its channel/wedge before bouncing again. A little less bullish, but would give a bit of confidence.
Bearish Scenario #1: Bitcoin drops straight through 6800, 6400, and 6000, to correct all the way down to its ascending support area (now between the low 4K area and 5K zone (depending on how fast the breakdown is). This causes ETH and other alts to correct/move sideways in USD value but explode on their ratios.
Bearish Scenario #2: The most bearish scenario of course has Bitcoin heading all the way back down to test the lows. Altcoins continue to drop on their ratios. This would send ETH to new lows (or at least to retest $80).
This is not financial advice. Just presenting the situation as I see it, and this is purely my opinion.
-Victor Cobra
You can see clearly on this chart that Ethereum is in a rising wedge pattern, which is often a sign of bearish continuation. A breakdown of this wedge, could easily send us back down to the low $100 area at least. However, if a wedge like this occurs near a bottom, specifically with increasing volume, it's possible for us also to say that it's an accumulation pattern.
We won't know one way or another until it happens. I'm trying to do my best to figure out what the direction of the market could be, but sometimes it's best to wait. Hence why this is a neutral post. Here are some scenarios I see happening, specifically for altcoins:
Bullish Scenario #1: This is the most bullish possibility. Bitcoin consolidates at or near 6.8K, and altcoins begin to finally catch up. This would make it easy for ETH to break out of its pattern (channel or wedge). A sustained break above 216ish would confirm this scneario in the near term. The reason why 6.8K is so important, is because I think if bulls can hold above it, it signifies a true trend reversal for Bitcoin. This would give people more confidence to buy alts like ETH. So far, the market has actually been following the most bullish possible scenario. Things can change quickly though.
Bullish Scenario #2: Bitcoin retests 6400ish as support; ETH corrects to the bottom of its channel/wedge before bouncing again. A little less bullish, but would give a bit of confidence.
Bearish Scenario #1: Bitcoin drops straight through 6800, 6400, and 6000, to correct all the way down to its ascending support area (now between the low 4K area and 5K zone (depending on how fast the breakdown is). This causes ETH and other alts to correct/move sideways in USD value but explode on their ratios.
Bearish Scenario #2: The most bearish scenario of course has Bitcoin heading all the way back down to test the lows. Altcoins continue to drop on their ratios. This would send ETH to new lows (or at least to retest $80).
This is not financial advice. Just presenting the situation as I see it, and this is purely my opinion.
-Victor Cobra
Note
Oh and Bullish Scenario #3: Bitcoin actually continues up towards 10K after consolidating a bit here. Some alts start to show signs of life as BTC moves up and then eventually corrects.Note
Bearish rising wedge has been invalidated: Note
Also bullish scenario #3 is playing out.
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