Ethereum (ETH) Risks Decline Below A Key Support If Bulls Fail To Save It

Ethereum (ETH) has shown some signs of bullishness recently but now it is beginning to be forced to remain below the 38.2% fib extension level. There are now two possibilities at this point. Either we will see the price break out of the symmetrical triangle to potentially pump again like before or we will see it break trend line support to enter a strong downtrend. So far, ETH/USD remains well above the 200 MA on the 4H time frame. However, things do not take long to change in this market. In my opinion, a lot of people are now waiting for this decline which is why I would not be surprised if we see another pump near term.

However, the focus should remain on the price eventually breaking this downtrend because that is what is going to happen sooner or later when the dust settles. Most new traders blindly rely on classic technical analysis knowledge in this market which could prove to be dangerous. For instance, you might see a gravestone doji on the 4H chart and think the price is ready to decline from there. However, that is not what necessarily happens in this market not when the volume is this low and the stakes are this high. Please note that it is very likely that a gravestone doji is followed by downside on the larger time frames but on the smaller time frames anything is possible which is why it is very important to remain vigilant and practice effect risk management.

The 4H chart for ETH/BTC shows that Ethereum (ETH) has now entered a short term uptrend against Bitcoin (BTC). Whether or not this uptrend is sustainable has yet to be seen but as long as the pair remains above the 200 MA, we can expect it to rally further. This is a sign that Ethereum (ETH) and other altcoins might yet make more moves against Bitcoin (BTC) before the beginning of a strong downtrend.

Every market moves in cycles. There are periods of uptrend and downtrend. In this market, what we have seen so far since the beginning of 2018 has been a strong downtrend which was followed only briefly by a strong uptrend. The major downtrend is not over yet despite the bullish phase in between. This is why it is very important to remain focused on the big picture. Even though the market could still pump higher from here, the focus should be on selling and not buying at current levels.