ETHUSD Levels And Perspective: Minor Reversal Zone.

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ETHUSD Update: Here is an evaluation on the hourly time frame. This time frame is where you can observe emerging price patterns to signal a more refined entry. Also I want to point out some very nice examples to the left of the chart: The higher low (HL) and the subsequent double bottom. These formations appeared within a price area that I labeled "Look for reversals" on a larger time frame evaluation (see related chart). The large blue and green colored areas are levels that were determined from the daily time frame.

Looking at the hourly chart, this market shows some key areas where it is possible for an upcoming bullish reversal pattern to appear. 181 to 190 is a price area that is within the .618 range of the recent minor upswing. If price is going to hold up, this would be a good area. The key is to wait for a reversal pattern like a double bottom or higher low to appear. This process can take a whole day. The point of waiting for a price pattern is to let the MARKET prove that it no longer wants to push lows.

At the moment, there is selling momentum, and as long as price stays below 207, the selling is likely to continue unless PROVEN otherwise by a reversal pattern as mentioned earlier. A conservative scenario that I would like to see in order to take action is the break of 207, and then look to buy the next retracement. Trades on this time frame are good for day or swing trade time horizons, but NOT buy and hold. As I have mentioned before, I am not holding this until after BIP 148.

Also note the 223 level is a resistance that was projected from the larger time frame. This resistance was a previous support area (inversion) which provided a great reference area to take profit if long from the previous reversal. I am mentioning this because when I project levels on these charts, that is exactly the reason why, they are relevant in the near future.

If we break 207, then that should open the door for a retest of the 223 resistance. For my plan, I will not buy, even if the reversal shows up, until 207 is first broken. I am trading this market very conservatively since I have my hands full with other markets (futures). A more aggressive strategy would be to get long a small amount upon validation of a reversal, buy another unit on the break of 207, and a third unit on the subsequent retrace (if the market offers that opportunity). And start selling at the 223 resistance. In this instance, sizing is the key to controlling risk, but my initial reference point is the 170 to 180 area. A price break below that will cancel any long idea that may unfold in the potential reversal area.

In summary, I share this analysis to provide levels and perspective since there are no actual trade setups at the moment. I prefer to stack probabilities in my favor and since the major trend is still bullish, I am more focused on swing trade longs off of supports, than shorts off of resistances. I am watching the 190 to 180 area for reversal patterns and then a break of 207 to signal that buyers are coming back, which will allow me to take a long position. These markets will continue to consolidate until BIP 148 on 8/1, which means no long term positions for me until after the big event.

Questions, comments welcome.