Ethereum's Rally Looks Like a Trap. Here's Why.

5 hari lalu

In this analysis, you will find a clear scenario for a potential short setup with precise conditions for confirmation and invalidation. No fluff or guesswork—only institutional analysis of capital footprints and pure price action. I will provide updates for every stage of price interaction with the POI in near real-time, so you can make timely trading decisions, not just observe events after the fact.

Context
Ethereum's recent sell-off was only stopped from falling into the abyss by Bitcoin's reversal and the trapped shorts that needed to be shaken out. The instrument looks very weak for any sustained growth. The bearish structure was confirmed by a daily Break of Structure (BOS) to the downside and the beginning of a higher-timeframe order flow from the global 61.8% monthly retracement level.

The Resistance Zone to Watch
I expect a little more upside under Bitcoin's influence, after which Ethereum will face the key resistance zone. This area is a confluence of:

• The 0.5 Fibonacci retracement level.
• The key supply zone that aligns with the range's Point of Control (POC).
  

A reversal from this zone could lead to a decline to take out the Previous Week's Low (PWL). The catalyst could be any weakness in Bitcoin, as ETH is clearly weaker (it fell out of its global range, while BTC held its).
I assume ETH won't pass this resistance because many retail traders are trapped in losing long positions above $2700, and there are no significant institutional POIs higher up to justify a price return.

The specific entry conditions are detailed on the 4h timeframe in the Note below.

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5 hari lalu

Nota

5 hari lalu

Nota

Ethereum has reached its POI, and the decisive moment is approaching. This will largely depend on Bitcoin, which has also reached its resistance but still needs to fulfill the condition of sweeping the PWH liquidity slightly higher to confirm its own short setup.

This sweep on Bitcoin will likely trigger a corresponding pop on Ethereum, which also still needs to sweep liquidity from the Asian session high. Following that, ETH needs to break back below the 0.5 level and initiate a bearish order flow.

I'm waiting for developments and either a confirmation or invalidation of the short setup today or tomorrow.

4 hari lalu

Nota

Ethereum did not start its decline yesterday as many expected because Bitcoin has not yet provided the trigger for it. The price still has two zones of interest to test before a potential drop.

During the mitigation of the supply zone yesterday, a new order block was formed, which I now consider as the first POI and the first scenario for a short entry. The second zone of interest is the order block that was inside the original supply zone; its mitigation and a return below the 0.5 Fibonacci level would constitute the second scenario for a short.

Bitcoin also has two potential scenarios in the near future, and which path Ethereum takes will entirely depend on which path Bitcoin follows. I have also published an update on the Bitcoin idea itself.

semalam

Nota

Scenario 1 from the last update was invalidated due to the break of the new order block. The start of this week showed that Ethereum, just like Bitcoin, is locked in a 4-hour range.

However, unlike Bitcoin, Ethereum still has stronger resistance above it in the form of the 4H order block that was originally inside the supply zone. Thus, the initial short scenario on Ethereum is still possible, but it would be a new setup with slightly different conditions required for confirmation. Specifically:

1. Mitigation of the 4H order block.
2. A deviation with the price returning inside the range, followed by the start of an LTF order flow.
3. Bitcoin's direction must align at that time and also show potential for a decline (ideally after its own liquidity sweep, which I mentioned in the Bitcoin analysis).

I will not consider a short without these conditions being met because the S&P 500, along with Bitcoin, could drag Ethereum even higher to the next resistance, despite its apparent weakness. If not now, Ethereum will have other good opportunities for short setups higher up. For now, I am waiting to see how the price behaves on both ETH and BTC.