Published
5 years ago on
December 14, 2018
Ethereum (ETH) is ready for a fall in the next few days. The 4H chart for ETH/USD points to only one possibility and that possibility is a fall in the near future. During the past few weeks, Ethereum (ETH) has faced rejection at multiple fronts. First it got rejected at the long term trend line that extends all the way back to when Ethereum (ETH) broke below its market structure. Second, it had to struggle against the 21 EMA resistance. When it failed to break past that, it declined well below it to settle at the bottom of a symmetrical triangle. As we have seen in the past, such symmetrical triangles have a history of being continuation patterns.
If the price is falling before entering the symmetrical triangle, there is a strong probability that it will continue to fall after exiting that symmetrical triangle. As we can see on the ETH/USD chart, the price has been falling since the beginning of this month before it entered the symmetrical triangle. This goes on to show that the price action might have been contained within a triangle for now but this is just to cool off technical indicators in order to prepare Ethereum (ETH) for the fall that it could not take in one go. The trading volume has started to decline once again as it does whenever Ethereum (ETH) reaches the full extent of its movement inside such a triangle.
As the trading volume decreases, it means that it is easy for a few big hands to swing the price either way especially around the weekend when trading activity is low. As long as Ethereum (ETH) tries to stall a fall below $80 to retest yearly lows, the bulls are not going to step in and the bears are going to keep looking for further downside. This kind of a situation benefits neither the bears nor the bulls and eventually the price makes a move in a definitive direction. Right now, that direction seems to be to the downside. Ethereum (ETH) is all set to drop below $80 during the next few days. The price is likely to retest the previous low before it can drop further or begin a trend reversal.
Ethereum (ETH) has plenty of room for a fall against the US Dollar (USD) same as the rest of the cryptocurrency market. However, there is also room for a decline against Bitcoin (BTC). ETH/BTC is yet to test lows of 2017The price does not have to fall significantly to test that level. It may not seem like a big deal but this is exactly what the bulls and bears need right now to settle the fate of Ethereum (ETH). If the price tests this level and rebounds strongly off it, it will convince the bears that there is no further room for additional downside. It will also convince the bulls to step in to pave way for the long anticipated trend reversal.
