Many people assume the Merge will be a buy-the-rumour-sell-the-news event. I was also of that opinion, but it is no longer my base case
I believe people still see a lot of risks arising from the upgrade, hence its success is not yet reflected in the price of ETH
This trade is a bet on a (short-term) wave of optimism which will set in once developers announce the success of the upgrade. This analysis is only for short-term (1-2 weeks), not for a long-horizon investment allocation (even though that wouldn't be a bad idea either)
Beware of the inflation number coming out today at 8:30 ET. The number must be below expectations to give us the green light with this trade. Otherwise, the expectations of further rate hikes will knock the price back down
Technicals:
I have been closely watching how the ETH evolves solely based on price action, without the use of any indicators
The important part was to break above the $1700 level (black line) and hold it. Ethereum has done this part perfectly, setting up a solid base just above that level, as you can see on the 4-hour chart, giving us also a terrific risk/reward ratio
Trade:
There are two ways to enter the trade (i) either go long right now or (ii) after the release of the CPI report; depending on your risk preference
I would use the red line as a stop loss, Ethereum has been forming that level for the past three days, so it should be fairly strong
If you use the green line for profit-taking, that gives you a lovely risk/reward ratioof around 6:1. However, you are more than welcome to set up your own risk management framework
Happy Trading! Dollero Exchange
Follow us for more analysis & Feel free to ask any questions you have, we are here to help
If you like our content, Please leave a like and a comment, it keeps us going
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.