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The Ethereum crypto coin (ETH) is currently trading at $142.87. Looking at the chart we see that the trend line was acting as support but recently the support line is broken with the formation of shooting star and evening star pattern, both are strong bearish indicators pointing at a downtrend. Current support level is at $142 and resistance is at around $149.
According to Dow Theory, ETH is currently appearing in public participation phase; during this phase, negative sentiment starts to dissipate. This phase tends not only to be a long lasting, but also the one with the largest price movement.
It’s also the phase in which most technical and trend traders start to take long positions, as the new upward primary trend has confirmed itself – a sign these participants have waited for. But currently we also see correction in this phase so taking a long position is not suggested.
When taking 9 period moving averages (blue) with 21 period moving averages (red), a bullish crossover is seen, with price moving above 21 period moving average and below 9 period moving average. Once the price stars moving above 9 period moving average it will indicate start of an upward rally.
Looking at Ethereum’s historical data, we see consequent similar conditions that the price grew almost 44% after the accumulation phase and we might see the same pattern again given the recurring conditions.
Looking at the chart we see evening star pattern pattern with price moving in a downward trend, so this opportunity can be used for swing trading keeping the target price at around $149; looking at long term trend we see that the target is at $159.
We also see the formation of cup and handle pattern which is a bullish pattern after which we can expect a rise of 60-70%. Before taking a fresh long position, it is recommended to wait for the price to settle at around $142 which is current support; for taking a long position, it is recommended to wait for the price to close above 9 period moving average with some good volume.