Ethereum Breaks Above The Trend Line Resistance
Technical Market Outlook:
The ETH/USD pair has made a local high at the level of $2,330 after the bounce from the lows located at the level of $2,165 was capped. The bulls has broken above the trend line resistance and quickly movied higher towards the 100 MA on H4 time frame chart. The intraday technical support is seen at the level of $2,240 and the intraday technical resistance is located at $2,330. The next target for bulls is seen at the level of $2,2400.
Technical Insights:
- Candlestick Patterns: The chart showcases a 'Hammer' and a 'Pin Bar', both of which can signal bullish reversals. Additionally, there's a 'Shooting Star' followed by a 'Doji', which often indicates indecision and could potentially signal a reversal if it follows an uptrend.
- Moving Averages: ETH's price is between the 50-period Double Exponential Moving Average (DEMA) and the 100-period Exponential Moving Average (EMA). The price being above the DEMA but below the EMA suggests a zone of consolidation.
- Relative Strength Index (RSI): The RSI stands at 59.75, indicating neither overbought nor oversold conditions. It suggests that there's still room for the price to trend before reaching an extreme.
The Intraday 1H Indicator Signals:
- 10 out of 23 technical indicators are showing Sell signal, 4 are showing buy signal and 8 are Neutral
- 9 out of 18 moving averages are showing Sell signal and 9 are showing Buy signal
Sentiment Scoreboard:
The general sentiment on the scoreboard is very bullish (80% vs.20% bears). Last week bullish sentiment increased even more (68% bulls vs.32% bears) together with the last three days sentiment (65% bulls vs.35% bears).
Weekly Pivot Points:
Pivot Points are key price levels used in technical analysis to identify potential trend reversals, support, and resistance levels in financial markets.
WR3 - $2,313
WR2 - $2,286
WR1 - $2,269
Weekly Pivot - $2,258
WS1 - $2,242
WS2 - $2,231
WS3 - $2,204
Bullish Scenario:
- Bullish Reversal Confirmation: If subsequent candles continue to build on the bullish momentum indicated by the 'Hammer' and 'Pin Bar', we could see the price moving towards and potentially above the 100-period EMA.
- Break Above EMA: A definitive break above the EMA could signal a shift to a bullish trend, possibly leading to testing the next resistance levels or setting new highs.
- RSI Advancement: An increase in RSI without hitting the overbought territory could suggest a strengthening bullish momentum.
Bearish Scenario:
- Reversal from Shooting Star and Doji: If the 'Shooting Star' and 'Doji' patterns are followed by a downward price movement, this could confirm a bearish reversal, particularly if the price falls below the DEMA.
- EMA as Resistance: Should the price fail to break the EMA, and it acts as resistance, this could lead to a downward trend or further consolidation within the current range.
- RSI Retreat: A decrease in the RSI could indicate waning bullish momentum, suggesting a potential shift to bearish sentiment if it falls below a key threshold such as 50.
Conclusion:
The ETH chart exhibits signs of a potential bullish reversal, but the presence of a 'Shooting Star' and a 'Doji' brings in an element of uncertainty that could swing either way. The price action in the upcoming periods, particularly in relation to the EMA and DEMA, will be critical in confirming either scenario.
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Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
