ETH → Ethereum Falling to $2,200!? A Prime Short Opportunity!Ethereum has reached the Resistance Zone at $2,850 and has shown the first signs of resistance. Should we enter a short?
How do we trade this? 🤔
The conditions are such that we should be looking for a short entry. We have three pushes up since the start of the last bull leg from $2,200, a strong Resistance Zone at the current price, and an RSI that is overbought at 78.00. We are in the potential short territory but need the sell signal and confirmation prior to entering a short.
Wait for the price to fall sharply and watch the candles after. It's likely we'll get a re-test of the $2,850 area before another sell bar occurs. Once that sell bar occurs, a 1:2 Risk/Reward Ratio is available to us if we enter the market at around $2,825. Set your stop loss into the Resistance Zone above the previous high and target 1:2 R/R for a take profit in the $2,350.
💡 Trade Idea 💡
Long Entry: $2,825
🟥 Stop Loss: $3,025
✅ Take Profit: $2,350
⚖️ Risk/Reward Ratio: 1:2
🔑 Key Takeaways 🔑
1. We have three pushes up since the start of the last bull leg from $2,200
2. Early signs of resistance at the current level
3. Strong Resistance Zone at the current level
4. Gap to the Support Zone
5. RSI is overbought at 78.00 and above the Moving Average, supporting the drop in price
💰 Trading Tip 💰
The longer a trend continues after 3 legs, the probability of that trend continuing lessens. Because of this decreased probability, we ought to reduce our risk when entering trades.
⚠️ Risk Warning! ⚠️
Past performance is not necessarily indicative of future results. You are solely responsible for your trades. Trade at your own risk!
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