ETHUSD Update: Price is holding, but the failed breakout and lack of progress above 349 is concerning and highlights the risk at these levels.
When strong markets break out, this usually attracts more order flow. ETH is a market that is closely watched, and the failed breakout above 349 is concerning because where are all the buyers? I realize these markets may be slow and do not behave exactly like the other financial markets, but to me, this price action is a red flag.
On the bullish side, there is a new higher low in place at the 334 level and the market looks like it should test the highs again. Upon a subsequent break out along with follow through this market should make an attempt to test the 380 resistance. If it fails again, then I would steer clear of any new longs until a retest of a significant support level like 309 or below which is now the .618 of this bullish swing.
The reason for my growing concern about this price action is this: price has been sluggish within the 324 to 349 resistance zone which is related to the .618 of the broader bear swing. The fact that it is having trouble breaking out of this zone makes me more cautious because this area is a very convenient place to form a big picture failed high. If this scenario unfolds, we are more likely to test supports that we have not seen in a while like 270. This is not a prediction, just a concern because of the way price is behaving at these highs.
This market is not bearish because it has not taken out any support levels that would signal that type of environment. The problem is if it's not pushing highs soon, it will become vulnerable to any piece of negative news and the selling momentum will be high. And for that reason, the risk of buying at these levels is just too high for me.
In summary, this market is slowly inching higher and still has supportive structure in place, but the lack of follow through is concerning because from my experience it implies an increased potential for weakness. Keep in mind, I am sharing my perspective and how I make decisions based on price action. I am not telling you what to do. I don't control your account, you do. And if you are comfortable taking the associated risks, then you don't have to wait it out like me. I would rather be wrong about being out, than wrong about being in.
I love your logical analysis!
I do want to mention that many ICO's are likely trying to unload their massive amounts of ETH at these levels, which could be taking away from the "visible" buying power.
Here is a chart from last night showing how far ETH has gone, and how much farther we have to go.
Very worrisome none the less because Eventually the buying power could try up.
double_bass
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@oh92, Do you not think we would see high volume if this was the case?
MarcPMarkets
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@niallmaguire1, not necessarily. Not if they do it in a low key and orderly way which can be done with software these days. They probably know how sensitive these markets are and making an effort to hide their footprints.
MarcPMarkets
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@oh92, nice chart yeah ICO activity can certainly be affecting the way this market is moving. Good to be aware of thanks for sharing.
salmanijaz
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Spot on again :)
I think all the coins are showing some strange behaviour and lacking volume.
BTC needs a healthy correction but it seems to stuck in the middle.
XRP is almost flat
BCH has almost completed the correction phase and also flat.
I think all these coins are looking for a PUSH and i wonder what will it be
I do want to mention that many ICO's are likely trying to unload their massive amounts of ETH at these levels, which could be taking away from the "visible" buying power.
Here is a chart from last night showing how far ETH has gone, and how much farther we have to go.
Very worrisome none the less because Eventually the buying power could try up.