Hi friends! In an attempt to give my lovely viewers a heads up on the potential dangers in this market, I would like to share this gloomy analysis with you.
Now, Let's take a look at Ethereum! Looking at the four hour chart for ETH, we can see that it has rallied off of yesterday's low, only to form an enormous bear flag consolidation pattern (black flag,) in the process. Typically, analysts will take the height of the flagpole, and subtract it from the breakdown point of the flag, to estimate a price target. When I make measurements like this, I usually like to find support levels that correlate with the price target area. As you can see, the red support level is my "primary" target for this bear flag, which is around $489.50. There hasn't been a breakdown yet, so there is no confirmation that this is a bear flag. However, it certainly looks, smells, and tastes like a bear flag, and they don't generally taste very good. All kidding aside, we need to see a breakdown from the flag, to know for sure. Taking a closer look at the chart, we can see that price action has cleared the 200 EMA (in purple) and is now holding support on the 38.2% retracement level. There could be slightly more upside, as ETH trades inside of the flag, but I think it will be limited. A sustained breakout above the topside of the flag, will negate it entirely. On the other hand, a breakdown will confirm the bear flag, and could quickly generate some intense selling. As a side note, it's important to realize that price targets aren't always met. Therefore, I have also considered a "secondary" target, where the flag could bottom if it breaks down. The secondary target is at the 78.6% retrace, around $615. In summary, we now have evidence to support the argument for a continuation in the selloff. A breakdown will be confirmation of that evidence.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media! Good luck trading everyone.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-
Now, Let's take a look at Ethereum! Looking at the four hour chart for ETH, we can see that it has rallied off of yesterday's low, only to form an enormous bear flag consolidation pattern (black flag,) in the process. Typically, analysts will take the height of the flagpole, and subtract it from the breakdown point of the flag, to estimate a price target. When I make measurements like this, I usually like to find support levels that correlate with the price target area. As you can see, the red support level is my "primary" target for this bear flag, which is around $489.50. There hasn't been a breakdown yet, so there is no confirmation that this is a bear flag. However, it certainly looks, smells, and tastes like a bear flag, and they don't generally taste very good. All kidding aside, we need to see a breakdown from the flag, to know for sure. Taking a closer look at the chart, we can see that price action has cleared the 200 EMA (in purple) and is now holding support on the 38.2% retracement level. There could be slightly more upside, as ETH trades inside of the flag, but I think it will be limited. A sustained breakout above the topside of the flag, will negate it entirely. On the other hand, a breakdown will confirm the bear flag, and could quickly generate some intense selling. As a side note, it's important to realize that price targets aren't always met. Therefore, I have also considered a "secondary" target, where the flag could bottom if it breaks down. The secondary target is at the 78.6% retrace, around $615. In summary, we now have evidence to support the argument for a continuation in the selloff. A breakdown will be confirmation of that evidence.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media! Good luck trading everyone.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
-JD-