Traders, I advise you to read this entire post to gain a better understanding of what I'm looking at.
It's been a while since my last trading position on ETH, back in August price completed a valid bearish bat pattern (shown on the chart) which was followed by a decline of almost 50% in two weeks.
Taking the time to reflect on Ethereum's situation from a technical standpoint the future direction is now becoming far clearer.
It has been struggling to break the $300 range for sometime now but a move above $400 is on the horizon.
Today I'm going to break down every aspect of the chart and explain in detail what I feel is happening from a technical perspective.
We're on the 4h chart with ETH/USD.
1. Bearish bat
The measurements for a valid bat pattern are detailed below. B: 0.382 - 0.50 C: 0.382 - 0.886 D: 1.618 - 2.618 Final X to D: 0.886
A closer look on the 4h chart at my previous pattern, take profit levels 1 & 2 were achieved in a relatively short time period.
2. Daily price structure
Right now price is trading within a small zone, between a minor resistance and newly formed support trenldine, which aligns with levels A & C of the bearish butterfly.
3. Bearish Butterfly
The measurements for a valid butterfly pattern are detailed below. B: 0.786 C: 0.382 - 0.886 D: 1.618 - 2.24 X to D: 1.272
It's not uncommon for harmonic patterns to occur one after another, especially with the previous pattern securing a nice return.
Currently price is completing the C to D leg of this structure and I estimate the pattern will complete on the 30th of November based on my measurement rules shown below.
The amount of time it takes price to form X to B is the projection for B to D.
Now remember, this is not certain... There will be many times when patterns take 2x longer to complete and still result in a profit.
I am only using my common principles to accurately determine the completion of the pattern.
4. Current price action
I would focus on the basics as of right now, I'm looking for a break of minor resistance and the support trendline to hold in order for the bearish butterfly to complete.
In the near future I will update this idea with my thoughts on Ethereum.
If we experienced a situation where the following happened.
It would still be a valid setup, as long as the C point does not exceed 0.886 and the lower trendline support is in tact.
If the bearish butterfly pattern completes I will let everyone know if it is a good area to short or close long positions, what we may find it the future is price pushes to around $520 at a 1.618 extension.
I hope this post has been helpful, feel free to leave a comment below.
Komen
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Extra analysis further indicating a move towards $400.
All main M and W type structures should all carry the qualities of a standard AB=CD.
This formation using the 0.50 C point indicates potential 2.0 which is the reciprocal ratio.
If price breaks and closes above resistance at B, this would open up an AB=CD BAMM trading opportunity.
Final target would be $450 upon completion of the bearish butterfly.
Komen
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Price closed above B, keep an eye on price action for a move to $400.
Komen
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Expecting price to hit $450 within the next 10 days, I will update further if I see this changing.
Komen
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$400 :) I’ll be updating shortly.
Komen
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Price broke the high at $412, the bearish butterfly will complete soon.
More updates to follow.
Komen
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$440, pattern will complete at $450, technical updates to follow.
Well done to those who held!
Komen
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I'm looking at $520 for a short term decline, keep an eye on price action.
Komen
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$520 as predicted, I’ll be looking for more opportunities to go long in the near future.