ETHUSD to enter large leg 3 impulse driven by reversal on ETHBTC
Diupdate
The title says ETHUSD, but the charts are ETHBTC. Keep on reading as that's intentional, I am bullish on BTC, but I think ETH will out perform it through to end of Q1 2018.
Etherum has been getting hammered by BTC the past 6 months. But things could change over the coming week. The TA on both ETHUSD and ETHBTC back up a big third leg coming up soon, and as we know, the third legs are often the longest and most vigorous.
Looking at the Monthly chart (bottom right) we can see ETH started leg 1 of a monster wave in January of this year. That spiked in June and has entered a prolonged correction under leg 2. IF leg 3 starts it is likely to be longer and go further than leg 1. We can see the purple dotted arrow which matches the projection and length of leg 1. Extending this takes us to around 0.245 by June of next year. As a sense check, that would take ETH to around 5000USD if BTC remained at its current level.
On the weekly chart (bottom left), we can see that ETH has been in a parallel downward trading range (green + dark blue) since July but is also meeting resistance from the light blue line formed from the June high. The breaking of this light blue line will be the first indication that a reversal could be on the cards. Breaking through the dark blue line would be a clear and conclusive signal of the reversal.
The daily chart (top right) show we are entering leg 3 of a minor wave (orange) that started on 8 December, where ETH met the bottom green resistance line and bounced back. IF we are in the correction, this leg 3 should be larger than leg 1 and would take us through both the blue resistance lines. This should happen in the next week but may take longer.
The hourly chart (top left) shows we have been in a consolidation trading channel of leg 2 since 15 Dec. ETH may start pushing against this channel in the next few hours.
I wouldn't suggest buying ETH vs BTC as I'm bullish on BTC. Buy aganist USD. However, this chart helps us understand where the signals are and potential entry to USD. I also expect a lot of you have money sitting in BTC, so it's good to understand when a switch from BTC to ETH would pay dividends.
Depending on your risk profile, there's 3 entry points for this trade and each also become a potential profit taking area for the previous, with the final target of around 0.065 which would be 1,300USD if BTC stays around 20,000USD (although I expect BTC to go up and so the ETHUSD levels would be higher).
S1: Breaking the current consolidation trading channel of leg 2: 0.041
S2: Breaking the light blue trend line from the June high : 0.045
S3: Breaking the dark blue trend line from the parallel downward trading range: 0.053
I'm personally already long on ETH but will look to add in more at each of the signals above, with the bulk going in on S3 as this will be firm confirmation of the reversal and that the downward trading range of leg 2 is over.
With leg 4 and 5 complete in Jan, we would be looking at Jan ETHBTC at 0.072. The following show what ETHUSD would be at with various BTC values:
10,000 720
20,000 1440
50,000 3,600
Etherum has been getting hammered by BTC the past 6 months. But things could change over the coming week. The TA on both ETHUSD and ETHBTC back up a big third leg coming up soon, and as we know, the third legs are often the longest and most vigorous.
Looking at the Monthly chart (bottom right) we can see ETH started leg 1 of a monster wave in January of this year. That spiked in June and has entered a prolonged correction under leg 2. IF leg 3 starts it is likely to be longer and go further than leg 1. We can see the purple dotted arrow which matches the projection and length of leg 1. Extending this takes us to around 0.245 by June of next year. As a sense check, that would take ETH to around 5000USD if BTC remained at its current level.
On the weekly chart (bottom left), we can see that ETH has been in a parallel downward trading range (green + dark blue) since July but is also meeting resistance from the light blue line formed from the June high. The breaking of this light blue line will be the first indication that a reversal could be on the cards. Breaking through the dark blue line would be a clear and conclusive signal of the reversal.
The daily chart (top right) show we are entering leg 3 of a minor wave (orange) that started on 8 December, where ETH met the bottom green resistance line and bounced back. IF we are in the correction, this leg 3 should be larger than leg 1 and would take us through both the blue resistance lines. This should happen in the next week but may take longer.
The hourly chart (top left) shows we have been in a consolidation trading channel of leg 2 since 15 Dec. ETH may start pushing against this channel in the next few hours.
I wouldn't suggest buying ETH vs BTC as I'm bullish on BTC. Buy aganist USD. However, this chart helps us understand where the signals are and potential entry to USD. I also expect a lot of you have money sitting in BTC, so it's good to understand when a switch from BTC to ETH would pay dividends.
Depending on your risk profile, there's 3 entry points for this trade and each also become a potential profit taking area for the previous, with the final target of around 0.065 which would be 1,300USD if BTC stays around 20,000USD (although I expect BTC to go up and so the ETHUSD levels would be higher).
S1: Breaking the current consolidation trading channel of leg 2: 0.041
S2: Breaking the light blue trend line from the June high : 0.045
S3: Breaking the dark blue trend line from the parallel downward trading range: 0.053
I'm personally already long on ETH but will look to add in more at each of the signals above, with the bulk going in on S3 as this will be firm confirmation of the reversal and that the downward trading range of leg 2 is over.
With leg 4 and 5 complete in Jan, we would be looking at Jan ETHBTC at 0.072. The following show what ETHUSD would be at with various BTC values:
10,000 720
20,000 1440
50,000 3,600
Catatan
We are in signal zone 1. Early buy, high risk high reward. Wait for S3 0.053 if you want a certain reversal signal.Catatan
Looking good. If you are waiting for S2 I suggest to hold out until near the top of that box (0.048) because all alts are a bit over heated. We might have a pull back and therefore false signal once BTC moves out of its consolidation pattern.Catatan
Ok, we entered signal two and had a small correction immediately there after (high of 0.047). If you followed the advice in the last comment, you wouldnt have enter the trade based on S2 yet. We are waiting for (0.048) before going long a little and SS3 (0.053) before backing the winning horse. Im not sold that the reversal is happening - I think it could happen but we need to see the signal. The trend has been downward within a descending trading range (best seen in the weekly chart. I want to see a clear indication of a reversal before scaling my position in ETH up. That will come with S3: Breaking the dark blue trend line from the parallel downward trading range: 0.053. Let's keep watching...
Catatan
I'm more convinced the reversal is likely to happen, but we need to wait for the clear breakout signal. It could easily reverse back into the downward trend to 0.02. S3 - 0.053 remains the clear signal that a reversal has taken place and I'll go in big then.Catatan
We are getting really close now. Make sure we break through properly before going in deep. We could easily get a false breakout here. I'm thinking 0.058, but I'll be flexible with what happens. I'll post if/when I buy.Catatan
Despite all the market turmoil, ETH continuing to threaten to break the long term channel. It had brief false break on 25/26 Dec before correcting back and going through sideways consolidation. I do not expect it to maintain this sideways momentum. Either it will break again to continue on the upward trend to 0.06/0.08 or it is going to slip back into the downward diagonal and probably go South of 0.02 BTC by mid/end Jan. I'm watching this closely and will be focusing my investment either on BTC or ETH on the back of it. It would be good to hear your thoughts?Catatan
We have now clearly passed the resistance line and entered signal 3:"S3: Breaking the dark blue trend line from the parallel downward trading range: 0.053 "
If the current trend continues we should see ETH outperform BTC by about 50% over the next two week.
Keep an eye on the 1 day trend, as it could still fall back into the downward trending parallels.
XRP has gone through some great growth to serplant ETH in No.2 spot. Given the solid TA on ETHBTC and the product success, once the XRP hype is over, we could see a lot of cash moving into ETH to see similar spikes.
Catatan
This formation is still looking good and very bullish. ETH took another step up against BTC today and briefly touched 0.065 yesterday. I expect this continue over the coming week or two before we see some sideways consolidation around 0.070 to 0.075. Talk is talk, but there is a lot of it out there about ETH marketcap exceeding BTC in 2018.
Catatan
I hope none of you jumped ship to BTC and even took the opportunity to top up on ETH at the low. ETHBTC bounced back aggressively from just below the bottom support (green). There's a risk it goes down from here, but the TA would suggest this was a normal point of consolidation and we will move back into the upward channel. Next target 0.075
Catatan
That upward target of 0.075 was hit easily. Time to swap back some into BTC for the short term? What do you think? ETHBTC now has four support options coming up over the next few hours/days.Catatan
Regarding the last comment, it hit the resistance turned support and boucned up (top green arrow).Catatan
In the last 24 hours, ETHBTC has broken through two trading channels. I'm expecting a bit of consolidation over the next few hours before it decides if it wants to break higher or consolidate down into an earlier channel.ETHBTC has been working closely with its 20 day Moving Average (MA) over the past 4 days. Each touch onto it a new impulse wave is created. I'll watch for the rebound off that and buy in further if it happens.
Catatan
Updated idea here:
Catatan
New analysis can be found here: 
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