The weekly $ETH candle did not confirm the bottom. Quite the opposite, it formed the Dark Cloud Cover that signals further move south. Let’s have a look at the different time frames from the different angles.
The High-Wave Doji is supported by overbought RSI and MACD at All Time High. The only way from there is down. At the beginning of June MACD histogram increased, but is now lower than in May and it does not look like jumping back. The main story will be told on the last day of June when the monthly print is made.
The previous week closure gave bulls some hope by closing above 8 EMA and these hopes were alive until the noon on Saturday. A strong move down just before the weekly closure shifted the odds back to the dark side. The Dark Cloud Cover and a closure below 8 EMA line send a strong bearish message. The move was well supported by various indicators that signal that the downside moves are not done.
Saturday’s candle had a good chance to form a strong bullish combo/candle, but failed miserably at the 100 MA line and formed a doji. If Sunday/Monday closes below 2260, $ETH could experience an acceleration downwards. In order to be considered bullish, a candle needs to close above 2450, better 2500.
On the chart I identified two most probable paths for the coin.
- The red count. If waves A and B are complete, I am expecting wave C to continue down in the next 1-2 weeks. The most typical runs for wave C (based on Fibonacci ratios) would be:
– 1.0x of length of wave A – target 266 (two hundred sixty six)
– 0.618x – target 1270.
Interesting that in both cases, the wave will cross 1423.20 which is a Long Term Support. It would force a major wave recount on a very long term chart that I shared in my monthly update. Let’s see how it plays, we should know the answer very soon.
- The blue count. This one assumes that $ETH makes a 180 degree turn and recovers from here. I view this path as a low probability one and would share the targets as soon as the reversal is confirmed.
Based on the information above, I expect a move down, possibly a very sharp. It could accelerate once a daily candle closes below 2260. I will share some interim targets as soon as ETH provides more clarity in the minor waves.
On May 16 (when $ETH was ~3700) 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, the forecast stands.
NOTE: If ETH breaks below 1423.20, there is a chance of triple-digit price in the nearest future.
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The call on May 16: