ETH Will Signal When The Downtrend Will Resume—Just Follow Price
Updated
Primary Chart: Ethereum's Bear Rally to Continue a Bit Further Before Downtrend Resumes
Chart shows Bollinger Bands, Fibonacci Levels and Supply Zone
Summary: ETH's short-term countertrend rally continues and points higher in the short-term before the downtrend resumes. Near-term targets are resistance and lie at $1798-$1823 range and 1912.49 over the next week. Only if price can hold and reclaim $1912 will price also have any chance of reaching $2000.
Ethereum's bear rally may continue a bit further this week before the downtrend resumes. The mouth of the Bollinger Bands are widening on the daily chart, indicating increased volatility that typically coincides with a larger directional price move. At this point, price is walking the upper band of the Bollinger Bands, which signals that the trend in the short-term is up. Furthermore, on the Primary Chart above, consider how price has held above the .50 retracement of the June to August rally at 1455, a short-term confirmation that this countertrend rally may last a few more days.
The countertrend rally's continuation is confirmed by the 8-day EMA, a simple but reliable gauge of near-term momentum and short-term trend. Note that although the 8-day and 21-day EMAs point higher in the short-term, bear markets frequently make sudden, volatile price moves in either direction. So traders and chart watchers should be ready for price to fail at any time and resume the larger-degree trend, which is down.
Supplementary Chart A: 8-day and 21-day EMA Point Higher in the Short-Term Despite the Bear-Market Context
Confirming that the short-term trend is upward, consider the anchored VWAPs from key highs and lows shown on Supplementary Chart B. Price has broken above each anchored VWAP placed on this chart including the one from the April 2022 swing high (purple), the June 2022 swing low (green), and the August swing high (yellow). In addition, two simple uptrend lines—two have been drawn to ensure that the entire range of trendline placement is included—also confirm the ongoing validity of the bear rally. Yes, this may frustrate bears for a bit longer—and to be clear, this author remains a bear in the intermediate term for ETH.
Supplementary Chart B: Anchored VWAPs and Trendlines Point to the Bear Rally's Continued Validity
It's helpful to remember that there is no need to guess when ETH will reverse it's current counter-trend / corrective retracement. Price and indicators will signal when this happens. It's so easy to get caught in guessing when price is rallying or declining. When price begins showing signs of failed breakouts, when the 8-day EMA turns down again, when the VWAPs are broken to the downside, the technical evidence will then show when ETH is ready to resume its downtrend.
Lastly, consider the key levels in addition to the supply zone around 2000-2100 shown on the Primary Chart. Major resistance lies at 1912.49, 2230.95 and 2549.41. Note: These Fibo levels shown below are more intermediate-term levels. It would take a major price move to reach $2549.41, though anything can happen including jaw-dropping rallies in bear markets—but this is not my prediction.
Supplementary Chart C: Intermediate-Term Fibonacci Resistance Levels
Lastly, consider the levels that are most important to watch this week before considering whether $1912-$2230 can be reached. Price must first must hold $1726 and $1751. Next price must reclaim the .618 retracement of its recent decline at $1798 / $1800. If that holds, then $1912 / $1915 come into play.
Supplementary Chart D: Short-Term Fibonacci Resistance Levels
tradingview.com/chart/rh6yeHnv/
Please note that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation, and countertrend trading, e.g., trading a rally in a bear market, is tricky and challenging even for the most experienced traders. Countertrend trades are lower probability trades as well.
Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.
DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
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ETH1!
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Chart shows Bollinger Bands, Fibonacci Levels and Supply Zone
Summary: ETH's short-term countertrend rally continues and points higher in the short-term before the downtrend resumes. Near-term targets are resistance and lie at $1798-$1823 range and 1912.49 over the next week. Only if price can hold and reclaim $1912 will price also have any chance of reaching $2000.
Ethereum's bear rally may continue a bit further this week before the downtrend resumes. The mouth of the Bollinger Bands are widening on the daily chart, indicating increased volatility that typically coincides with a larger directional price move. At this point, price is walking the upper band of the Bollinger Bands, which signals that the trend in the short-term is up. Furthermore, on the Primary Chart above, consider how price has held above the .50 retracement of the June to August rally at 1455, a short-term confirmation that this countertrend rally may last a few more days.
The countertrend rally's continuation is confirmed by the 8-day EMA, a simple but reliable gauge of near-term momentum and short-term trend. Note that although the 8-day and 21-day EMAs point higher in the short-term, bear markets frequently make sudden, volatile price moves in either direction. So traders and chart watchers should be ready for price to fail at any time and resume the larger-degree trend, which is down.
Supplementary Chart A: 8-day and 21-day EMA Point Higher in the Short-Term Despite the Bear-Market Context
Confirming that the short-term trend is upward, consider the anchored VWAPs from key highs and lows shown on Supplementary Chart B. Price has broken above each anchored VWAP placed on this chart including the one from the April 2022 swing high (purple), the June 2022 swing low (green), and the August swing high (yellow). In addition, two simple uptrend lines—two have been drawn to ensure that the entire range of trendline placement is included—also confirm the ongoing validity of the bear rally. Yes, this may frustrate bears for a bit longer—and to be clear, this author remains a bear in the intermediate term for ETH.
Supplementary Chart B: Anchored VWAPs and Trendlines Point to the Bear Rally's Continued Validity
It's helpful to remember that there is no need to guess when ETH will reverse it's current counter-trend / corrective retracement. Price and indicators will signal when this happens. It's so easy to get caught in guessing when price is rallying or declining. When price begins showing signs of failed breakouts, when the 8-day EMA turns down again, when the VWAPs are broken to the downside, the technical evidence will then show when ETH is ready to resume its downtrend.
Lastly, consider the key levels in addition to the supply zone around 2000-2100 shown on the Primary Chart. Major resistance lies at 1912.49, 2230.95 and 2549.41. Note: These Fibo levels shown below are more intermediate-term levels. It would take a major price move to reach $2549.41, though anything can happen including jaw-dropping rallies in bear markets—but this is not my prediction.
Supplementary Chart C: Intermediate-Term Fibonacci Resistance Levels
Lastly, consider the levels that are most important to watch this week before considering whether $1912-$2230 can be reached. Price must first must hold $1726 and $1751. Next price must reclaim the .618 retracement of its recent decline at $1798 / $1800. If that holds, then $1912 / $1915 come into play.
Supplementary Chart D: Short-Term Fibonacci Resistance Levels
tradingview.com/chart/rh6yeHnv/
Please note that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation, and countertrend trading, e.g., trading a rally in a bear market, is tricky and challenging even for the most experienced traders. Countertrend trades are lower probability trades as well.
Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed.
DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
ETHUSDTETH1!ETHUSDETHUSDETHUSDTNote
Price fell to support at $1726. It briefly broke below $1726 and then recovered almost immediately when the CME futures session opened. Now price is back up to $1748. This failed breakdown supports the thesis of higher prices into next week. Targets at $1798, $1823 and $1912.Note
On Sept. 11, this post stated: "remember that there is no need to guess when ETH will reverse it's current counter-trend / corrective retracement. Price and indicators will signal when this happens. It's so easy to get caught in guessing when price is rallying or declining. When price begins showing signs of failed breakouts, when the 8-day EMA turns down again, when the VWAPs are broken to the downside, the technical evidence will then show when ETH is ready to resume its downtrend."Update Point 1: It looks like ETH is signaling that the downtrend may be resuming. Watch the $1455 level. If that breaks, then this entire rally the past several sessions will constitute a failed breakout = bearish = downtrend resuming. The 1455 level is the .50 retracement of the June-August 2022 rally. This coincides with the VWAP at 1457 anchored to the June 18, 2022 low. When those break, the downtrend will have very strong confirmation.
Update 2: 8 EMA has turned and is sloping downward on the daily chart. This is partial confirmation that signals this may be the spot where the downtrend is resuming. Combine this fact with where BTC reversed, and the case for further significant downside is even more plausible.
Note
This post accurately forecasted that the downtrend would resume. Price has fallen from $1780 to $1220 (approximate round numbers). However, this post incorrectly inferred that the bear rally had a little further to run as of Sept. 11, 2022. The next day after this was posted, price went sideways for one day, making a slightly lower high in the 1700s, and then began falling. However, the update on Sept. 13 quickly noted that the 8 EMA had turned and was sloping down, confirming that this "may be the spot where the downtrend is resuming" -- and also noted that BTC was reversing, which strengthened the case for further downside.
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