Price trapped in a channel in December
Since the middle of December, we saw price going back and forth between $550-$850, bouncing off both the supply and demand zones on multiple occasions, creating a solid channel formation. At the end of the year we began to see a solid trend line forming towards the supply zone giving the bulls some hope that price may be ready to take off.
Figure 1: Channel created by a supply and demand zone, then forming a nice rising trend line towards the supply zone
Ethereum Takes OFF! But now what?
On December 3rd, price officially broke out the supply zone and began to skyrocket towards new highs. Christmas came a little late, but it came bearing gifts as price rallied very nicely and created a STEEP trendline to right above $1,300. However, as January progressed, we have seen price starting to dwindle and test the lower levels going as low as $1,100. While price made it back above the trend line, faking out quite a few buyers, we are coming to a very precarious situation.
- We have been in a HUGE rally on a steep trend line for quite some time, meaning eventually it will have to break.
- Price is approaching a possible double top formation with a solid supply zone forming at right under $1,400.
- Between the supply zone and the trend line, a very nice triangle is forming to create a reaction point for entries.
Figure 2:Price broke the supply zone and skyrocketed into a steep rising trend line
Is it time to Buy?
Right now is a very risky time to be bullish trading Ethereum, as price can very well create a double top and make a bearish move. At the moment, good risk analysis would be to wait to see what the price will do once it reaches the supply zone.
What does a Double Bottom and Double Top look like?
@originalworks
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I guess ETH has not done enough correction. I would be more bullish on ETH if it touches $1000, so we could see an A-B-C correction.