Ethereum: Cup and handle in a double bottom
Updated
ETHBTCHi all,
I believe now is a good time to shift your attention towards Ethereum and perhaps even place a trade. You may have noticed that in all my ideas for longer time frames there is always 2 components that drive what position to take. The first is technical based and the second is fundamentally based.
Starting off, we can see that the price chart has formed a semi-complete double bottom at the 0.75 fibonacci retracement of the all time high. To complete the double-bottom, price needs to reach the 0.5 fibonacci retracement level at 0.09420921. From a technical standpoint, price is likely to reach this level again shown through the cup and handle inside the double bottom pattern. From the cup and handle, the price target is 0.10168460 which is obtained by extending from the 'handle' the height of the 'cup'.
For a longer term target based on the double bottom reversal, I see a price of 0.15412165, returning to its all time highs. I also believe that this target may be reached by the end of September to the end of October based on fundamentals discussed below.
On the MACD, we are currently in an uptrend, but what is more interesting is the histogram. From the corrective wave of the all time highs, downwards momentum has decreased. Presently, there is equal bearish and bullish momentum seen in the tight range (2 horizontal aqua lines). This signals that the bearish momentum on this market is starting to deteriorate. The current period is that of decision, whether to continue downwards or reverse upwards. Based on the technical and later explained fundamentals, there is a higher chance that momentum will shift bullish.
Fundamentally, Ethereum is headed for a hard-fork, Metropolis, of which the first phase, Byzantium, begins by the end of September (themerkle.com/ethereums-metropolis-update-will-occur-through-two-separate-hard-forks/). This update is a step towards improving the current Ethereum framework. Key highlights include:
. Possibility for recipients to pay gas prices
. Improved privacy (masking) (zero-knowledge proofs) (cointelegraph.com/news/ethereum-announces-metropolis-hard-fork-coming-late-september)
.Increase in mining difficulty
.Thereby beginning the shift to POS
The last points are likely to impact highly as the view on holding Ethereum changes, where there would now be some incentive to hold Ether.
For a more certain entry with less risk, wait for price to break the 'handle' top and close above on high volume (As a guideline 'high volume' would be volume greater than double the moving average volume). If price fails to break-out and price rebounds from resistance, look for an entry at the last minor support which would be at 0.07499423. This may be a good idea as the uptrend for the cup and handle that precedes it is very short, thereby making it the weakest pattern in this analysis.
Entry: 0.083 or 0.07499423
TP1: 0.09420921 (Short-term)
TP2: 0.10168460 (Short/medium - term)
TP3: 0.15412165 (Longer term)
If there is anything you'd like to add or there is something you disagree with, please comment. I always welcome feedback!
Note
Price broke straight through, 0.075 at over 4 times the average volume on the 1 hourly. High chance price will move to 0.066 which is a major support that has been tested twice previously. 0.066 is a good entry point if it meets the conditions I talked with Paalsern about. If price closes above 0.075 on the daily, this is a strong sign that buying pressure is still present and will make for a comfortable entry. However for now, the descent to 0.066 is looking the most likely.
Thanks!
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