Ethereum (ETH) Trend Undecided, Technical Indicators Remain Mixed (TA - 7th of October)

By 0xJonnyDee | My Technical Analysis | 7 Oct 2020


Ethereum (ETH) has made an attempt at moving upwards past resistance, but failure caused the price to retrace almost completely.

Even though some technical indicators are bullish, a breakout from the current resistance area is required for the trend to flip bullish.

 

Ethereum Trading Range

The Ethereum price has been decreasing since Sept 1, when it reached a high of $489.57. The decrease continued until it reached a low of $311.04 on Sept 5. The low initiated an upward move which was relatively short-lived since ETH was rejected after reaching $394.

Currently, ETH is stuck in a range between $315-$380. A breakdown from the support area could trigger a rapid decrease towards $240, while a breakout above the resistance area would likely cause the price to move towards the 0.618 Fib level at $420.

 

9990de655e0132a35cc9359692cb146bcf9e8a9cb197fd39df83f47242f2635c.png

 

Technical indicators provide a very mixed outlook;

  • The MACD is increasing and has generated bullish divergence, but is nowhere close to positive territory
  • The RSI has failed to generate bullish divergence and is trading below 50
  • The stochastic oscillator has made a bullish cross and is increasing

While this might not be unusual since the price is consolidating, it shows that the daily time-frame is not sufficient in determining the direction of the next movement.

 

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The weekly chart is still bullish, despite the bearish engulfing candlestick created during the week of Aug 31- Sept 7.

The price is still following an ascending support line and has created long lower wicks at the 0.382 Fib level of the entire increase — a sign of buying pressure.

 

6b467d1c4530fddca133b913e6d211feca1f1b300e61ee8fb621b7adfe4b554f.png

 

Wave Count

The most likely count suggests that the price began an A-B-C corrective formation (shown in black below). with the March 3 low, and is currently in the fifth sub-wave (blue) of wave C.

Based on the length of the previous movements, the wave could end near $545.

 

649ff17d6f963cfac2992cba17500134c781d91af127e395e89f4f964f130511.png

 

If the count is correct, then ETH has begun a new upward move has completed waves 1 and 2 (in blue below).

A decrease below the wave 2 low of $313.29 would invalidate this particular wave count, while a decrease below the Sept 5 low of $308.42 would invalidate the bullish scenario.

 

0447a7f1337627d2e9bcbf775d7a5df891a2594987d43e4c934393120c3c5940.png

 

Alternate Count

An alternate wave count suggests that ETH has completed its upward move and began a bearish impulse (shown in red below) on Sept 2.

The issue with this count is that wave 5 (outlined) does not look like an impulse but rather an A-B-C formation, making this count unlikely.

 

b63d3737704ecf89fa6813b3aad6a73ecb5d1866903d4cff1ed4faef89ccaefe.png

 

The bearish count would be invalidated with an increase above the Sept 17 high of $390, while its sub-wave count would be invalidated with an increase above the Oct 1 high of $368.1.

 

254ae3f097f282069a48d8173ed0ed81cac24c791d27b842280bfb9bf54ac3f7.png

 

ETH/BTC

The ETH/BTC chart shows movement relatively similar to its USD counterpart. The price has broken out from a descending resistance line in place since the Sept 1 high but failed to increase significantly after doing so.

Currently, the price is approaching the ₿0.0315 support area, with the main resistance levels being found at ₿0.0333 and ₿.036.

Technical indicators are neutral/bearish, and a bullish cross in the stochastic oscillator is seemingly getting rejected.

Therefore, there is not sufficient evidence to determine the direction of the future trend.

 

What do you think we will see in the coming week / month? If you like this content, consider tipping the article / following me, so more people see this content and we get a nice discussion going on. 

Also, If you are interested in trading, I would suggest you try out BeInCrypto's free Telegram chat. I am there and it is growing very quickly (over 7,700 members) where they discuss the market and share interesting content. They also have a free premium channel where they have a cryptocurrency trading course and daily trading signals. If you are interested, you can click here.

Until next time, stay classy crypto world!

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0xJonnyDee
0xJonnyDee

A Crypto Marketing Wizard with over 7 years experience. Former Marketing Manager at CoinMarketCap. Feel free to get in connect with / content me on - Twitter - https://twitter.com/0xJonnyDee


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