Could ETH Be Nearing a Bottom with "Blood in the Streets"?

15 Jun 2022

ETH could be nearing a bottom. The selling has been brutal. ETH has sliced through its 200 SMA on higher time frames, i.e., the weekly chart.

In the coming days or weeks, if ETHUSD hits 875 approximately where the orange circle appears on the chart, the second leg of the decline will be proportional and 100% of the first leg of the decline in dollar terms.

This is a multi-month trade idea, attempting to catch a multi-month trading low in ETH. The target is shown above at 2869, a 50% retracement of the entire decline from the November 2021 high at 4867. This is a multi-month idea.

However, do not try to catch a falling knife without a stop. A tight stop should be used to keep risk / reward acceptable and prudent. A stop could be placed at 800, or at -10%, or wherever a person's risk tolerance is.

If ETH closes below 750 where substantial support seems to lie, this trade is invalid, and the point of invalidity has been reached. This is where discipline is key for traders—knowing when to cut losses short is vital to survive. (Long-term investors who don't mind holding with a 50% loss maybe have a different approach, with fundamental crypto arguments to support their investment.)

Do your own due diligence, risk of loss is high with crypto, so understand the risks in light of your personal situation. And read the disclaimer below please.

19 Jun 2022

Catatan

ETH bounced almost exactly at 875, just 4 dollars higher at 879.
This is very near the 1.00 Fibonacci projection of the first leg of the decline as projected from the start of the second leg of the decline. There is long lower shadow, which suggests the possiblity that buyers have moved in at least temporarily to support price or there has been an exhaustion of sellers at this point.
See the orange circle below:

30 Jun 2022

Catatan

ETH bounced very nicely off the 875 support that I showed in the charts above. On June 18, the day ETH bounced off this low, a long shadow appeared nearly tagging the 872.79 line at the 1.00 Fib. projection. ETH bounced a whopping 44.8% off the low, so it would have made an excellent trade for a nimble trader.

BUT the current price action in crypto strongly suggests another flush lower. I'm less confident that 875 will hold as support. For example, check out Tradersweekly post on ETH today with a solidly bearish outlook.

It will be useful to see how price responds, however, on a retest of 875. I suspect price could break through it. But if price rebounds a second time with a slightly lower low and material momentum divergences, this is something to watch closely.