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Ethereum (ETH) Inches Closer To Breaking Out Of Ascending Triangle

 
Ethereum (ETH) Inches Closer To Breaking Out Of Ascending Triangle
Ethereum / Breaking News / Analytics

Ethereum (ETH) is trading with an ascending triangle that will soon have to be broken. Whether to the upside or to the downside remains to be seen but historically we have seen ascending triangles break to the upside most of the time in this market. It is therefore likely that we might see continued sideways movement in this market for a while but sooner or later ETH/USD will have to break out. If it ends up breaking to the upside, then it would be in a position to break past even the 38.2% fib retracement level and rally towards $200. ETH/USD just like BTC/USD broke out of a falling wedge and entered an ascending triangle while also invalidating a descending triangle at the same time.

This is the first point that the bears have experienced pain but I think more bears are yet to be trapped as the price starts to rally from current levels breaking past key resistance levels. It is in the interest of the market makers to have the bears believe that there is still a lot of weakness in the market. This has been achieved for the most part in the form of strong moves to the downside after sluggish rallies. We have seen many of these in the past few days and such moves have made the bears more confident to short the market at this point which I believe is going to be a fatal mistake. The price of Ethereum (ETH) could easily rally towards $200 from current levels before it begins its downtrend which is why I think it is very premature to enter short positions at this point.

The daily chart for Ethereum Dominance (ETH.D) shows us that dominance has now declined below the 50 day EMA but this could be a false indicator because the RSI as well as the Stochastic RSI point to a very bullish outlook. Most retail traders like to look at straightforward closes below or above their favorite trend lines and EMAs and when that happens they enter a position. For instance, in this case, a close below the 50 day EMA would get a lot of bears very excited.

I think the cryptocurrency market is a lot more complex than the stock market or the forex market and therefore requires a more advanced approach. I don’t think relying merely on technical analysis could yield good results in this market. There has to be a psychological angle to every investment decision being made and I think the right approach would be for traders to enter every trade assuming they are wrong and then managing their trades such that they minimize their lose in case they are proven wrong. That way, the odds of making more profitable trades would be much higher.

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