$ETH ended the week at $2276 with high bearish odds on the daily and weekly charts. On May 16 I did “expect a min retrace of 23-38% (3350-2700). Probability of a deeper one – 50-62% (2200-1700) is rather high. ” So far, as planned. Let’s dig deeper into the charts.
#Ethereum formed a Tower Top on the weekly chart. A very powerful bearish combo hints for the lower prices ahead.
Let’s look closely at the different time frames.
Two days before the monthly print. In order to make a bullish candle, $ETH needs to rally to above $3800. Everything below would be considered bearish. Chances of 60-70% rally in 2 days are rather slim.
The previous week, the weekly formed the Tower Top and broke below the 8 EMA line. This week – a High Wave Doji (bearish flavor). The price is below 8 EMA. MACD declines. The doji opens a wide range. Most likely, we would see some see-saw movements in the 1700-2900 range. The next weekly closure above 2900 would signal that the worst is behind. A closure below 1700 would point towards a much lower price. The monthly candle on May 31 should add clarity.
Odds: Neutral – Moderate Bearish
The candle formation is very close to Three Black Crows that typically signal a continued decline. The daily price was strongly rejected to below 8 EMA line and marginally broke through 100 MA. If confirmed through 100 MA, the next big support is 200 MA ~1650.
Long Term Charts – on May 16 and May 29
From the long term perspective, the price is in the target area (green rectangle) and it can start a rally anytime now. However, I can see an increasing odds for a prolonged correction that I marked as “alt IV”. I hope the monthly on May 31 helps with the answer.
FORECAST & Items to Watch:
I think ETH would try to bottom slowly over the next several days. The main question is whether this bottom would be the end of correction, followed by a strong rally, or it would be just the first wave of a multi-month action. I hope to get the answers on May 31.
If ETH breaks below 1423.20, there is a chance of triple-digit price in the nearest future. The odds were slim, but increasing now.
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The call on May 16: