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Ethereum (ETH-USD) gained more weight in trading this week as a result of reduced demand (lower ICO) and also potential ICO cashout effects. Many investors who have earned premiums from ICOs launched in 2017 and at the start of 2018 are still selling their holdings surplus for ETH and therefore converting ETH into cash. So what do you reserve the next week of trading for ETH?
Fundamental Outlook
The US Securities and Exchange Commission rejected 9 questions of the ETF, citing the lack of sufficient protection for investors in the structure of Bitcoin ETFs. Although it was disappointing for the crypto markets, it had only a slight dampening effect on prices as this decision had already been assessed. The opening is still there for an ETere of Ethereum; which Vitalik Buterin (founder of Ethereum) supported, though hesitantly, about its importance.
Technical Perspectives
The technical analysis for ETH / USD begins with the weekly chart. This chart indicates a number of important points.
Weekly Chart ETH / USD: 25 August 2018
a) The price formed a downward flag over three months; from April to July 2018. This bearish flag was resolved in August to produce the bearish movement that is stuck in the AB support line.
b) C & # 39; is a CD line that served as a support until it was interrupted by the breakdown descending from the bearish flag.
c) The momentum indicator has formed higher lows while the price is forming minimum lows. This is a situation of divergence.
d) The current candle closes at midnight UTC + 1. The relationship between the closing price and the support line is of paramount importance and will determine the price direction for the last week of August and beyond.
e) The support line is $ 281.65. The next support below this is at $ 140.22, while the closest resistance above is the previous support that was broken last week, at $ 369.71.
There are two possible scenarios on how this configuration will end up playing.
Scenario 1
By putting all these points together, the price should rebound to the current support level in an attempt to correct the divergence. This view is supported by the presence of two pinbar at the support level
Weekly chart ETH / USD as of 14 August 2018 [19659011] Also notice in the previous weekly chart shown above, the presence of a wedge that is evolving, with edges marked by the descending trendline A and the tendency line cending. This also adds credibility to the scenario in which we can see bullish inversion in gear.
Scenario 2
The second scenario would be that the price would break below the current support area. For this to happen, we must see the weekly candle closed under this support. However, there is still nothing on the chart to support this vision. This is different from the previous scenario in which we see at least three technical reasons to support a bullish recovery.
Possible price movements
So what would be the prospect for the ETH / USD pair in the future?
The general market the sentiment for the long-term cryptocurrency market is still bearish. However, the chances of a bullish retracement occurring are quite high. Therefore, it is likely that we will see the recovery of prices in the ETH / USD if, by the end of the week, there has not been a downward rupture of the support. However, this will only be a bullish recovery. To see a bullish reversal, some good news must hit markets to stimulate buying sentiment.
Buyers and sellers of ETH / USD can participate in this market. For buyers, they may want to exchange the short uptrend rally. However, this rally will probably stop at the previous support resistance, which is at the $ 369.71 level. Buyers would also need to look at Fibonacci retracement levels or Fibonacci fan lines to see the possible areas where such an event would end.
Sellers looking to sell on the rally may decide to do so if the resistance line remains firm. The picture will become clearer in the weeks to come.
Market Sentiment:
The long-term, medium and short-term prospects of the ETH / USD pair are:
· Long-Term – Bearish
· Medium-term – Bearish
· Short-term – Slightly bullish
Disclaimer
Note: this analysis was done on a weekly chart. It takes a whole week to form a candle, so these moves may take several weeks. Entries should be made on graphs at shorter time intervals such as the daily chart.
This piece is for educational purposes only and should not be construed as a recommendation to buy or sell ETH at any price. The cryptocurrency markets are very volatile and require that the user is well funded and has a good trading experience.
Disclosure: I am / we long ETH-USD.
Information on commercial relations: This article was written in collaboration with an analyst.
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