IF this is an extended bear market, where might the next point of control be? Since the beginning of Ethereum, the point of control (price level or range with the most volume: buy or sell) has made two distinct large jumps. The first just was about 1000% from the its previous POC level, and the second was about 1100% from its previous level. Would it be reasonable to think that the next POC level would be between 1000% and 1300% above where the current POC sits? Could be... definitely not taking this pattern to the bank since Ethereum really hasn't been around long enough to solidify this trend. As far as I can see, Ethereum has been in uncharted waters since its beginning. Therefore, I don't think there is much reason to fully expect Ethereum to do something, simply because its happened in a previous cycle. It could. But it doesn't HAVE to. That said, this pattern would imply that the next major POC will be somewhere in the 1491-1920 range (above where it currently sits at 136). I should note that this could mean we retest the 2018 bull market high.
I'd also like to speculate on some other things I saw in the chart.
- Weekly bearish divergence (14 period RSI) = bad news. We've already seen a pretty large pullback after ETH made a clear bearish divergence in May this year. It happened in spring/summer 2016 coinciding with about a 72% drop from top wick to bottom wick. We also saw this happen in January 2018, coinciding with about a 94% drop from top wick to bottom wick. Currently we are in the middle of the developing downtrend from the bearish divergence formed in May this year. From ATH to the lowest wick post ATH, we have fallen as much as ~60%. Which is not as bad as the other two.
- The weekly rsi currently sits in a level (58 ish) where ETH bounced up from multiple times in 2017 before putting in the 2018 major bull market high, forming the bearish divergence, and subsequently tanking down. It also sat in this level for a little bit following that 2018 high, before ultimately sinking as low as 22.5.
So its entirely possible ETH finds support where it is and continues up some more solely based on this. But it could also mean we're in for a bear market since we're back in this rsi level after forming the bearish divergence.
- 21 period MFI has shown similar bearish divergences as well.
- ETH is still largely overextended from the upper developing value area line (about 266% extended), even after the recent correction. The majority of buying volume went in well below where we are right now (between 80 and 700). This has me thinking that ETH still has room to go down before buyers feel less risk and can really step in. I think it could go as low or even maybe a little lower than my guess for the next major POC (1491-1920). Could it retrace all the way down to where the current value area starts? Sure, but i'm inclined to believe that the upper value area line should continue to rise as people buy the dips and maybe new bigger players start developing a position.
- ETH and crypto in general has shown some life over the past few days. So i'm also prepared for the scenario of this being just a very short term blip before continuing even higher as well.
I'd also like to speculate on some other things I saw in the chart.
- Weekly bearish divergence (14 period RSI) = bad news. We've already seen a pretty large pullback after ETH made a clear bearish divergence in May this year. It happened in spring/summer 2016 coinciding with about a 72% drop from top wick to bottom wick. We also saw this happen in January 2018, coinciding with about a 94% drop from top wick to bottom wick. Currently we are in the middle of the developing downtrend from the bearish divergence formed in May this year. From ATH to the lowest wick post ATH, we have fallen as much as ~60%. Which is not as bad as the other two.
- The weekly rsi currently sits in a level (58 ish) where ETH bounced up from multiple times in 2017 before putting in the 2018 major bull market high, forming the bearish divergence, and subsequently tanking down. It also sat in this level for a little bit following that 2018 high, before ultimately sinking as low as 22.5.
So its entirely possible ETH finds support where it is and continues up some more solely based on this. But it could also mean we're in for a bear market since we're back in this rsi level after forming the bearish divergence.
- 21 period MFI has shown similar bearish divergences as well.
- ETH is still largely overextended from the upper developing value area line (about 266% extended), even after the recent correction. The majority of buying volume went in well below where we are right now (between 80 and 700). This has me thinking that ETH still has room to go down before buyers feel less risk and can really step in. I think it could go as low or even maybe a little lower than my guess for the next major POC (1491-1920). Could it retrace all the way down to where the current value area starts? Sure, but i'm inclined to believe that the upper value area line should continue to rise as people buy the dips and maybe new bigger players start developing a position.
- ETH and crypto in general has shown some life over the past few days. So i'm also prepared for the scenario of this being just a very short term blip before continuing even higher as well.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.